Why the US Banking System Is Divided in Two Groups? The delinquency rate on credit-card loans at all commercial banks is very low, whereas the delinquency rate on credit-card loans is high only at commercial…
Where Does Inflation Come From? Mainly inflation comes from excess money supply growth. There is too much money in the system chasing too few goods and services. Over the long term, Nominal GDP = Money Supply x…
Sell in May and Go Away? Maybe Not this Year Because the third-year of a president’s term is positive (91% of the time since 1925) and in six of the past seven years the US…
Why Is Core Inflation So Low Compared To Previous Business Cycles? The Consumer Price Index Less Food & Energy (Core CPI) is very low compared to previous business cycles in the US, for several reasons:…
S&P 500 Dividend Yield Since 1871 Since 1871, the long-term average dividend yield for the US stock market is 4.34%. The current yield of the S&P500 is 1.87% Is there an anomaly in the past…
Yield Curve vs. Real Fed Funds Rate In modern history, every recession was preceded by an inverted yield curve and high real interest rates. When an inverted yield curve occurs, short-term interest rates exceed long-term rates.…
The Short Interest in the S&P 500 ETF (SPY) to Lowest Since Late 2017 Is it a contrarian indicator? Only time will tell… The market is strong and historically, the 3rd year of a president’s…
The S&P 500 Hits All-Time High Bulls make money and are happy again… Yes, but until when? Keep in mind that the US stock market is currently overvalued by 9%. Image: Hedgeye Risk Management LLC
Is Residential Investment a Drag Since the Great Recession? Indeed, it is very low compared to other business cycles. And because housing is already in a slump relative to other economic cycles, it shouldn’t cause a…
Since 1990, No Recessions Without 4% Wage Growth Since the beginning of the Great Recession, wage growth has been slow in this business cycle. But keep in mind that since 1990, no recessions without 4%…
How Have Real Personal Consumption Expenditures Declined Ahead Of Every Recession? Consumer spending drives the US economy. Historically, Real Personal Consumption Expenditures, which accounts for about 70% of GDP, decline before a recession. That’s not…