It’s All About the Benjamins
For this week’s indicator, I want to delve a little deeper into this idea of the money supply and how it affects the stock market. In general, we know that more liquidity is good for the stock market. However, the money supply—a component of liquidity—also...
Trust but Verify
OVERVIEW The Dow Jones Industrial Average rose 5.7% last week, capping its fourth consecutive week of gains and its best four-week stretch since April 2020. The S&P 500 Index rose 4%, notching its best two-week period since November 2020. And pulling up the...
The Last Curve Standing—No More
Well, it finally happened. Of all the leading indicators flashing red for the economy, the 3-month/10-year Treasury yield curve was one of the few to remain positive—until now. As our featured chart shows, the 3-month/10-year Treasury yield curve...
Gaining/Losing Leverage
For this week’s indicator, we look at margin debt and how we use it to measure market sentiment. Margin debt is a measure of the amount of stock market borrowing that investors are doing with their brokerage accounts. When there is an increase in margin debt,...
Market Mourning
OVERVIEW A relief rally hit Wall Street last week as all three major U.S. stock indices ended in the green. The S&P 500 rose 4.7%, up two of the past three weeks. Same with the Nasdaq Composite, which rose 5.2% for the week. And the Dow Jones Industrial...
Housing Halt
This week’s chart looks at mortgage rates and how their sharp rise this year has led mortgage applications to drop to their lowest level since 1997. Specifically, the top half of the chart shows the average rate for a 30-year fixed mortgage, going back to the...
Income Competition
When it comes to generating income in retirement, an investor has two primary choices: stocks and bonds. A bond is straightforward; the income comes from the bond’s yield. On the other hand, stocks throw off dividends, which have the potential to be lucrative...
Macro Take the Wheel
OVERVIEW The U.S. stock market was mixed last week. The S&P 500 lost 1.55%, and the Nasdaq Composite dropped 3.11%. However, the Dow Jones Industrial Average registered gains of 1.15%. Foreign stocks declined, with developed country markets dropping 1.35%...
Estimating Earnings
Third quarter earnings season is upon us. So, for this week’s featured chart, we show the consensus estimates for year-over-year growth in S&P 500 reported earnings per share by calendar year. The two lines I want to focus on are the light blue and orange...
Hitting the Brakes
Earnings are an important driver of stock market returns. But the stock market is a complicated beast—it doesn’t just trade off earnings growth alone. The key insight of this week's featured indicator is that the market trades off the change in the earnings...
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