Thursday, October 13, 2016

What'd you miss?

That's just a little spin on the song "What'd I miss?" from the Broadway hit Hamilton which has been on non-stop repeat in my household since my kids bought the album (side note - it is really good if you like history and/or modern music - listen to Cabinet Battle #1 for a sample and note there is some mildly nsfw language).

Overnight we received another data dump from China which will fuel concerns about a global slowdown in consumer demand and stocks are reflecting that mood right now (most European markets are down about 1%).  This will take us a back to the September tantrum levels (when the markets sold off over the hint of rising interest rates.) and the next move may be interesting. 

Here are some of items that caught my eye so far this week:

* The idea that there is cash on the sidelines waiting to rush into the markets may be a fallacy as liquid assets as a percentage of household wealth sits at its lowest levels since the dotcom bubble (1999).

* Railroad intermodal cargo fell for a second consecutive quarter.  Last time that happened was .... say it with me.... yep, 2009.

* HSBC made headlines yesterday forecasting an imminent crash saying that earnings expectations and valuations have become "unmoored from corporate realities". I'd argue that we've been unmoored from reality since at least 2014 but tomato, tomahto.

* Consumers reporting that they may miss a credit card payment hit its highest level since 2014.  Most worrisome was a real increase in those reporting concerns with incomes over $100,000 - which is indicative of a stretched high-end consumer.

* Alcoa kicked off earnings season with a face plant (don't be confused by $AA's stock price - they did a 1 for 3 reverse split last month) and Goldman said that once again expectations are way too high for Q3 earnings.


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