Tag: recession

Equities Have A Tough 2023 Ahead

Equities Have A Tough 2023 Ahead

There will be more equity market fallout. Historically, equity markets haven't found a bottom while the Fed is in a tightening cycle. I see the NASDAQ index falling to 9,000 during Q1 2023 as: 1.) the Fed tightens further; 2.) weak 2023 earnings guidance is provided on Q4 EPS calls; and 3.) global recession combine … Continue reading Equities Have A Tough 2023 Ahead

Stocks To The Moon, Fundamentals Be Damned

Stocks To The Moon, Fundamentals Be Damned

"Did Powell just say that the pace of Fed Funds Rate increases may slow? Let's run stocks higher through year-end, fundamentals be damned!" I've never seen a more lazy equity market in my life. Fundamentals have not mattered since the COVID lockdowns and Fed policy matters far too much. The market is to blame as … Continue reading Stocks To The Moon, Fundamentals Be Damned

P/E Multiples In Flux

P/E Multiples In Flux

P/E multiples will be in flux for the next few months. Phase I will begin in October. Phase II will begin in January. The sequence will look something like the following: Analysts: Many sell-side analysts will revise their December quarter Revenue and Earnings estimates downward coming off of the September quarter earnings calls beginning in … Continue reading P/E Multiples In Flux

The NASDAQ Could Re-Test COVID Lows & The Rise of High Yield

The NASDAQ Could Re-Test COVID Lows & The Rise of High Yield

Could the NASDAQ re-test the COVID lows of March 2020 when it sat around 6,900? Yes. That would require a prolonged recession (which we expect) AND The Fed not restarting its ultra-dovish monetary policy of Quantitative Easing combined with a near zero Fed Funds Rate. Who knows how the Fed will behave in 2H 2023 … Continue reading The NASDAQ Could Re-Test COVID Lows & The Rise of High Yield

A NASDAQ Bottom. QT Or Not To QT?

A NASDAQ Bottom. QT Or Not To QT?

If the Fed raises by 100 BPS tomorrow we believe there is another 10% downside to the NASDAQ before October earnings. We believe the NASDAQ will continue to work lower as the Fed hikes its Fed Funds Rate and as Treasury yields climb. We expect the Fed's rate hiking will stop by early next year … Continue reading A NASDAQ Bottom. QT Or Not To QT?

The Fed Can’t Tame Inflation. A Deep Recession Will.

The Fed Can’t Tame Inflation. A Deep Recession Will.

With $31 trillion in public debt outstanding the Fed can't quickly take interest rates to where they need to be (north of 8% CPI), to tame inflation. The interest expense on the public debt would be punitive at that level (Debt to GDP is 123%, up from 31% during our last inflationary period of the … Continue reading The Fed Can’t Tame Inflation. A Deep Recession Will.

Housing Supply & The Weakening Consumer

Housing Supply & The Weakening Consumer

The Housing Supply ratio tells a story of a weakening consumer. Housing Supply: The ratio of new houses for sale to new houses sold is at its highest level (9.3) since May 2010, the latter part of the Great Recession. This despite the fact that mortgage rates have ticked down in recent weeks. Housing Supply … Continue reading Housing Supply & The Weakening Consumer