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Is Chat GPT Good For Microsoft’s Earnings?
We asked Chat GPT, the new artificial intelligence (AI) engine, that exact question. The answer follows below: Chat GPT is a good way to improve Microsoft’s earnings because it allows users to communicate with each other directly, which can help improve customer service and product quality. Additionally, it can help Microsoft attract new customers and […]
Jan 27, 2023
Real Value Versus Wall Street Value
A shift to stocks that offer real value and dividends is one of our key investment themes to start the year. We say “real value” versus plain old “value” as the term value can be misused, especially by ETFs and mutual funds. In our recent article, Passive Value Investors Are Not Value Investors; we compare […]
Jan 26, 2023
Leading Indicators Warn of Recession Ahead
The U.S. Leading Economic Indicators, compiled by the Conference Board, fell by 1.0%. The decline was the tenth in a row. As shown below, such a streak of consecutive monthly declines has led to seven of the last eight recessions. The pandemic-related recession is the outlier. Given the unexpected and somewhat random nature of the […]
Jan 25, 2023
Major Markets Test A Critical Juncture
The S&P 500 and other major markets are testing a critical juncture. As we highlight below, the S&P 500 pushed through the year-old resistance line that stopped all rallies last year. The index also forms a wedge, with the market setting a higher low in late 2022. Wedges often end with sharp moves, up or […]
Jan 24, 2023
Summers Warns the Fed
Former U.S. Treasury Secretary Larry Summers spoke strongly to CNBC about the necessity for the Fed to continue its fight against inflation despite recent inflation data. Specifically, Summers is concerned that if the Fed and other central bankers do not stay aggressive, the potential for a second round of high inflation is possible. Per Summers: […]
Jan 23, 2023
The Debt Limit Is Upon Us Again
The Debt Limit has been reached, and the Treasury is resorting to “extraordinary measures” to keep the government running. While the situation may sound dire, it is the status quo. Since 1960, Congress has acted 78 different times to permanently raise, temporarily extend, or revise the definition of the debt limit. If you fret that […]
Jan 20, 2023
Yen On A Rollercoaster As The BOJ Disappoints
The Bank of Japan (BOJ) left its short-term interest rate at -.10% and vowed to maintain a 0.50% yield cap on its 10-year notes. Investors were expecting the yield cap to increase and thought the BOJ might raise its short-term interest rate. Instead, the BOJ disappointed, which set the yen and Japanese bonds on a […]
Jan 19, 2023
0DTE, Volatility is Lurking Behind the Scenes
Despite its growing popularity among retail investors and influence on markets, 0DTE is probably a term most investors are unaware of. 0DTE stands for zero days until options expiration. These are put-and-call options on individual stocks and indexes that expire within 24 hours. As the graph from Goldman Sachs shows, almost half of the options […]
Jan 18, 2023
Banks Kick Off Earnings Season
Earnings from the big banks were generally good, but the banks expressed concern about the economy. JP Morgan initially traded lower despite beating expectations on earnings and revenues. Of concern, the bank built its loss reserves by $1.4bn. While more than expected, it pales compared to the $18 billion added in 2020. The bank warned […]
Jan 17, 2023
Homebuilder Cancellations Are Off The Charts
The HOPE analysis we presented in Monday’s Commentary addressed the typical progression of economic data leading to recessions. The H in HOPE stands for housing. Housing is often the first segment of the economy to feel the weight of higher interest rates. The Commentary shows a graph of plummeting homebuilder confidence. Such is not surprising […]
Jan 13, 2023
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