Record Valuation Dispersion 1951-2017 Today, there’s an extreme valuation divergence. The crowd invests in the most expensive part of the market. And the Value vs. Growth differential has never been so extreme, even during the…
Sell in May and Go Away? Just keep in mind that 2013, 2014, 2015, 2016, 2017 and 2018 were positive in May. Image: Hedgeye Risk Management LLC
Why the Fed Can’t Raise Interest Rates Above Inflation Rate, Today? The Federal Reserve can’t raise the Fed funds rate above the inflation rate because the US productivity growth is too weak.Net Domestic Investment to…
Has Apple’s Intrinsic Value Really Changed Since December Lows? Not really! but Apple is up nearly 50% since the December lows. Is there a method to the market’s madness? Yes, see our advanced stock market…
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…