Capital spending by American business has been slack for nearly a year, but will grow in the coming months. Orders for non-defense capital goods (excluding aircraft) have actually declined since last August. GDP data suggests slow spending growth for business equipment and software. Nonetheless, there’s good reason for optimism. Capacity utilization in manufacturing fell in…
Two months ago, I did a piece called A Fascinating Ratio, which suggested that a major reversal was coming once the ratio reached about 2.0. At the time I did the post in mid-May, the ratio was a little under 1.8, but thanks to the unflagging strength of equities, as well as the unwavering suckiness…
The Dow Jones Industrial Average ended last week on July 10 with a close of 17,760.41, down just 0.4% year-to-date and 3.2% below its all-time intraday high of 18,351.36 set on May 19. The Dow 30 is below its 50-day simple moving average of 17,970 and volatility since June 29 the index has traded back…
by Bryce Coward, Gavekal Capital As we look at our screen for Friday we see basically all commodities down between 1-2%, but this is just the continuation of a much longer-term trend. Indeed, economically sensitive commodities like copper, crude, natural gas and aluminum (charts below) are all plumbing/trying to plumb new cycle lows and we’re…
I. Introduction China is known for its secrecy. But in the end, are all governments not alike in that aspect? This brief article calls to question the recent exposure of China’s gold holdings (official nation reserves). Said simply – things don’t add up. China last reported its gold reserves in 2009 with 1,054 tons and…
This old clip seems very appropriate… Full Throttle until around 2:00… everyone smiling as the ‘boat’ surges ever faster… then hubris gets its revenge… Just as we said this morning… We expect the traditional no volume, USDJPY-levitation driven buying of ES will surely resume once US algos wake up and launch the self-trading spoof programs….
Today Paul Krugman wrote in the New York Times, “Many economists used to think of the labor market as being pretty much like the market for anything else, with the prices of different kinds of labor — that is, wage rates — fully determined by supply and demand. So if wages for many workers have stagnated…
There are a number of great companies in the market today. By using the ModernGraham Valuation Model, I’ve selected the five most undervalued companies reviewed by ModernGraham. Each company has been determined to be suitable for Defensive Investor according to the ModernGraham approach. This is a sample of one screen that is included in ModernGraham Stocks & Screens,…
Interest Rates and the Euro After the introduction of the euro, many peripheral countries in the euro area experienced a major credit boom. The reason for this was that these countries previously had “soft” currencies, this is to say, they regularly devalued their currencies instead of implementing economic reform. Devaluation is the easy way out…
Morgan Housel from Motley Fool polled a bunch of his colleagues and a few other bloggers, asking them to sum up their investment philosophies in ten words or less. Of course there is no magic in ten words but the idea was that philosophy and strategy should be simple. My favorite from the Housel piece…
