Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

Loading...
Most Recent Stories

THE DRUNKEN WALK CONTINUES….

Markets are tumbling today as the drunken walk home continues.  I have to admit that I hardly feel sober in this walk amongst other investors as the market remains highly volatile and directionless albeit for brief periods.  Like a drunk trying to find his way home the market appears to know exactly where it is heading for a brief period before staging a dramatic turnaround only to find convincing evidence to the contrary.  This morning’s roundabout came thanks to consumer confidence data and stocks are down 1.25% on the news.

Earlier this morning we received quite a bit of mixed data on the retail front.  Home Depot and Sears reported better than expected quarters while Target missed on sales and Nordstrom warned about a second half consumer slow-down.  On the bright side, the weekly data was quite strong.  ICSC reported 0.9% year over year gains and 2.3% week over week gains in sales.  Redbook also reported strong consumer trends with a 1.9% year over year improvement.

Case Shiller housing data did little to add conviction to an already confused market.  Prices were essentially flat in December and continue to find support as government stimulus bolsters prices.  Regular readers are well aware of my opinions here.  I think the government is simply suspending the laws of supply and demand and ultimately it is a battle they will lose.  Prices need to decline further in order to meet the demand of the massive supply that continues to roil housing markets.  We have spent a great deal of time discussing the dynamics of bubbles.  This market is no different.  If I had to place a wager on housing prices I would venture to say that we will still be discussing the “recession” in home prices in 2020.  I wonder every day if 12 more months of enormous pain would have worked out better than 10 more years of Chinese water torture (i.e., the “workout” route we have chosen).

The confusion really struck the market when consumer confidence data disappointed to the downside.  Analysts were looking for a continued rebound to the 55 level, but a dramatic disappointment of 46 is hitting the markets hard.  Investors are now concerned that the already weak consumer is about to get even weaker.  The Nordstrom comments justify such thinking.

Comments are closed.