A Commitment to Recapitalize European Banks is Bullish for US Financials
The Euro rallied 2% today against the USD causing a sharp reversal of crisis-fearing “risk off” trades which have been working against all financial markets around the world. The Euro rallied based on indications that France and Germany are going to work seriously towards recapitalization of the European banking sector. This has been one of…
Read MoreOccupy Wall Street – Part Protest, Part Woodstock, Part Circus
Occupy Wall Street is part protest, part Woodstock, and part circus act, but none of it has anything to do with Wall Street. I live in Manhattan and figured I would check out the scene this weekend not quite sure of what to really expect. There has been plenty of financial press calling the protest…
Read MoreCrying Wolf – False Recession Calls Brutally Hurt Returns
The ECRI has come out and caused a stir from continually touting their “unavoidable recession” forecast. In addition, ECRI co-founder, Lakshman Achuthan has been continually highlighting their 3/3 track record without forecasting a false positive. While this track record is impressive, Crackerjack Finance would like to highlight a term from our disclaimer; “past performance is…
Read MoreUS Economy Demonstrates Resiliency – Retailer Comp Sales Strengthen in September
Despite massive uncertainty stemming from the manner in which Europe is handling its financial crisis, a gut wrenching stock market sell-off (the S&P 500 was down 7.2% last month), negative headlines almost every day, and predictions towards the end of the month that the US economy is now “in a recession”, the US consumer continues…
Read MoreYum! Brands – Results Indicate Strong China Consumption Growth Continues
Yum! Brands (YUM) released results after the close of market yesterday. Yum is the world’s second largest quick service (fast food) restaurant after McDonald’s and operates the KFC, Taco Bell, Pizza Hut, Long John Silver, and A&W Restaurant franchises. Yum is an important company I follow because of the exceptionally strong gearing to China. This…
Read MoreExcesses Cause Recession – A Comparison of 2008 and 2011
Recessions are typically caused by some sort of an excess. Real economic activity stretches too far and the subsequent unwind causes a retrenchment via a sudden and abrupt change in business and household behavior. There have been a number of excesses that have built up in the global economy over the past couple of decades.…
Read MoreFinancial Conditions are Driving all the Market Fears
Positive data and developments on the real economy front are being ignored while increases in financial stress are being focused on. The pervasive gloom in the financial markets is a result of growing fears of another financial crisis. If this were to unfold, the financial crisis would surely cause a global recession but I’m remaining…
Read MoreChina PMI – No Evidence of a Hard Landing
China’s official PMI was released over the weekend (after financial markets closed on Friday) and the September data point came in slightly higher than last month and slightly higher than expected. The total manufacturing PMI index came in a 51.2 which is the strongest month of the past 4-months. As important as the slight uptick,…
Read MoreChina Hard Landing Fears – The Reality and The Preposterous
Slowdown fears in the market have shifted to China. The past two days has seen the start of a shift in sentiment with China exposures viewed more as risk than as opportunity. There is clearly some slowing in China, and there should be, because the government has been trying to slow the economy to help…
Read MoreStrong Labor Market Data Point – Unemployment Claims Solid Despite Department of Labor Explanation
In a curious press release, the Department of Labor came out this morning and highlighted some atypical calendar alignments for the unemployment claims data which make it more difficult for the government to adjust the not seasonally adjusted claims data for seasonal changes. As a result, the seasonally adjusted claims data fell by 37k to…
Read MoreRefinancing Activity Hits New Highs – Conditions now in Place for the Housing Market to Turn
Reports have recently been popping up that 30-year fixed mortgage rates in the US have approached 4%. This is a new low for the cycle. Much of the analysis I have read regarding mortgage rates is that they do not matter. The rational goes something like this: since mortgage rates have come down from the…
Read MoreGreece Will Stay On Board – Merkel and Papandreou Plan a Dinner Date in Berlin
Greece will ultimately stay on board. There I’ve said it – and it is really what I think will happen. There were a number of “unity” headlines hitting over night which have led to a continuation of the rally in global risk assets. Emerging Markets which looked sufficiently panic sold to call out yesterday are…
Read MoreGold – The Spot On Take From The Fundamental View
The Fundamental View has done a great job profiting from the bull market in gold and has also called the correction over the past month spot on. Worth reading for all gold investors. Click here to read The Fundamental View’s recent analysis of the gold market. The above link will take you right to The…
Read MoreEM Stock Markets – Destabilized by Currency Sell-offs and Capital Outflows
Developed market equities are attempting to stabilize based on additional talks from Eurozone leaders who are meeting with the IMF and reported to be discussing items such as expanding the size of the EFSF, creating a TARP-EU, and recapitalizing more of the European financials. Developed market investors are attempting to look ahead during scary times.…
Read MoreTom Brady, Mos Def and Deckers launch Ugg for Men
Decker (DECK) has been one of the biggest success stories in the consumer space this decade. Since the depths of the financial crisis the stock has more than quintupled from sub-$20 to $100. The brand expansion and sustainability of growth have been questioned all through the bull market in the stock. Ugg has been the…
Read MoreNike’s Strong Results Indicative of Solid Global Consumption
Nike (NKE) reported an excellent set of results after the close last night. Headline earnings were $1.36 vs a street consensus of $1.21 (12.4% beat). I listened to the Nike earnings conference call and was really impressed with the strong business trends relative to the obvious dislocations we are seeing in the market and talk…
Read MoreEurope’s Minimalist Approach Is the Wrong Course
What an 18 hours, as a conflux of negatives weigh on the market. In wrenching fashion, the US markets are down 6% since yesterday at 2:00pm. Most international markets around the world are down significantly more. Many emerging markets are off over 10% over two days. The Fed implemented Operation Twist yesterday, and the size…
Read More