Wall Street Breakfast: Must-Know News [View article]
GH, also it is pretty evident that the markets were getting ready to correct going into May, however a strong labor report for April reversed that and caused the latest rally. So people clearly think that the current policy environment is negative for growth because of the tax increases and spending growth reductions but that is simply clouding their perception because oil and more employment seem to be doing a good job of negating that.
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AB, just a few months ago we were speculating about negative GDP growth in Q1 as a possibility. Then it comes in at 2.5%. I think the economy has bee seriously misjudged. Remember our current growth is coming despite the payroll tax increase AND the sequester. If we do 2% in H1 that is probably closer to 4% without those two impacts and you need to understand, they are done, factored into GDP and no longer play a role in future growth once we get past Q2.
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The market may simply be reacting to the fact that oil prices have peaked and we are producing a massive amount of new oil in the US. Oil really matters and the amount of oil we now produce here and thus recieve the residual economic impact is no longer small. Roughly 1M bpd equates to a 1% increase in GDP. Since last fall we have grown oil production at that level or more. That is a significant long term economic boost to our economy that no one likely was factoring in a year or two ago. Now the markets have to respect it because it has happened and it is just a matter of time for the people to spend their new found oil wealth.
Wall Street Breakfast: Must-Know News [View article]
wyostocks, what makes you say that? It seems to be that the markets are following earnings since the P/E's are not out of whack. Further, given that markets are forward looking the current price should reflect earnings for Q3/Q4 not Q1/Q2.
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GJ, why do you think the fed easing off of QE3 will be such an impact on the markets? Reality is the money is flowing into the market to harvest dividends not speculate on dot.bombs (well excluding Tesla). When the fed stops buying treasuries and mortgages that doesn't mean all of a sudden people need to liquidate stocks to buy mortgages and treasuries. Indeed, with a sudden massive shrinkage in our deficit, we might not even need to have the fed buy any as the market may be starving for more US treasuries given the demand.
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Remember, new home starts much stronger than expected, vehicle sales are also growing robustly and finally drilling more oil in the USA. That doesn't spell a weak economy that spells a strengthening economy.
Wall Street Breakfast: Must-Know News [View article]
No, I think it will be a headfake. For this really to be a correction we need to see the Russell 2000 break below 900. Instead what you are getting is a pro induced attempt at spooking the market that comes right when there is limited economic data to douse their attempts. Reality is that the employment situation is healing fastr than people think. That makes the payroll tax cut a non-event and cutting any government spending by making workers go home for a day without pay definitely has ZERO effect on the real economy.
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There is a spike in gasoline prices in the midwest, likely caused by some retrofitting of 3 refinieries in the midwest that are being retooled to use the Canadian tarsands crude.
Wall Street Breakfast: Must-Know News [View article]
AB to assume a correction is being very premature. Right now we will see whether the pros have the ability to run the market down. I think they will fail because there is money on the sidelines and early fed tapering isn't a negative it is a signifcant positive because it means the economy is recovering faster than expected.
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Trust me, it was nothing compared to the concentration camps and don't believe all of the propaganda about how noble all of the inmates were. It was a fight for survival and you definitely didn't see the best of mankind, you far to often saw the worst.
Don't Buy The Dip Yet - Sell The Bounce [View article]
While I concur that this correction phase likely will last till the June employment report, I am not sure it will be that large, i.e. 10% type territory. Reality is that Friday the pros reversed this market because of the fear of earlier fed tapering than expected. That isn't a negative though, it is simply a means to form some short term panic and for the pros to make a profit.
So I think that in relatively short order the markets till recover post June employment report and this will end up having been a buying opportunity, not the time to get out of the market.
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Up 2% early down 7+% at the end. Gotta love those reversals. I was actually looking forward to a reality check in Japan, they are weakening their currency but their trade deficits keep growing. So getting the opposite effect. You know that isn't going to end well.
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Well the pros are busy selling given yesterdays reversal. So his is the famed QE selloff, now the only question is how shallow will it be. Reality is that Uncle Ben mentioning the taper could start soon is a very bullish signal about the economy. So people need to weight the impact of removing stimulus versus the growth in the economy. I think the economy wins.
On the oil front, growth rates are tapering off to only 1M bpd levels. If tis trend continues it would not be as bullish as I had hoped though estimates of 600k bpd Y-Y growth between 2012 and 2013 are already there due to the many months of 1.2+M bpd increases so far this year.
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Aileron, actually the payroll tax is already a flat tax. So you can simply do the math using the revenue generated from payroll taxes to see what sort of a tax rate you need, then apply it to those making over $100,000 AGI that don't pay payroll taxes on that income above that level.
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Wall Street Breakfast: Must-Know News [View article]
Wall Street Breakfast: Must-Know News [View article]
Wall Street Breakfast: Must-Know News [View article]
Wall Street Breakfast: Must-Know News [View article]
Wall Street Breakfast: Must-Know News [View article]
Wall Street Breakfast: Must-Know News [View article]
Wall Street Breakfast: Must-Know News [View article]
Wall Street Breakfast: Must-Know News [View article]
Wall Street Breakfast: Must-Know News [View article]
Don't Buy The Dip Yet - Sell The Bounce [View article]
So I think that in relatively short order the markets till recover post June employment report and this will end up having been a buying opportunity, not the time to get out of the market.
Wall Street Breakfast: Must-Know News [View article]
Wall Street Breakfast: Must-Know News [View article]
On the oil front, growth rates are tapering off to only 1M bpd levels. If tis trend continues it would not be as bullish as I had hoped though estimates of 600k bpd Y-Y growth between 2012 and 2013 are already there due to the many months of 1.2+M bpd increases so far this year.
Wall Street Breakfast: Must-Know News [View article]
Wall Street Breakfast: Must-Know News [View article]