“All you need in this life is ignorance and confidence, and then success is sure.”
-Mark Twain
Yesterday’s US Consumer Confidence report for March 2017 registered a 196 month high. Yep, that’s the highest level of confidence in over 16 years. Must be a bunch of happier dumb and deplorable people, eh?
While my own political ignorance may very well remain my macro market bliss, I’m cool with that. Never have so many (who have made so much on the political system) been so mad at the acceleration in the US economic data.
From “soft data” (which is a leading indicator btw), to the “hard” stuff (like Durable Goods, Capex, and US Home Prices all accelerating), all you need in this market life is another correction. Success buying these damn dips has been sure.
Back to the Global Macro Grind…
Ok, I’ll go all data dependent on you again this morning, tabulating the aforementioned from the last week:
- Durable Goods +5% year-over-year growth; Ex-Aircraft & Defense +3.4% year-over-year growth
- Capex +2.7% year-over-year growth in FEB (up y/y for 3 months in a row, after a 2yr long #recession)
- US Home Prices (Case/Shiller) +0.9% month-over-month and +5.7% year-over-year = 3 year high
I’ll let some crass, “lower class”, person help MSM intellectuals differentiate between what’s soft and hard. In simpleton-math-people speak, all of this data is currently accelerating, on a trending basis.
If you have friends who happen to hate these US stock market rallies that are born out of the US economic data accelerating (that’s precisely what happened yesterday), ask them these questions:
A) Do you feel more or less confident when the value of your home hits 3 year highs?
B) Do you feel more or less confident when the value of your equity portfolio hits new highs?
Imagine that, some of this Confidence Ripping stuff actually has to do with non-idiot-rich-people feeling richer too. Or are all rich people “super smart” and getting longer of US growth stocks on all pullbacks since November?
What if you’re a wanna be richer person who runs a small or medium sized business?
A) Do you feel more or less confident when your taxes go down?
B) Do you feel more or less confidence when your regulations go down?
How about if you run a business and/or get paid a bonus by a business whose growth and profits are #accelerating? Considering growth was slowing from Q115 to Q216 and corporate profits were in a #recession, does this rate of change matter?
But really, tell me how you feel!
Does it really matter how we, the top 10-20% of income earners in America, feel about this whole thing? Does it make sense to separate people into political and economic “classes”? How do you feel about that? Are deplorables dumb and rich people smart?
I can tell you right now that what I personally feel has absolutely nothing to do with my data driven process. When I tell you I think GDP is going to accelerate from the +1.3% in Q2 of 2016 to +3.1% (year-over-year) in Q417, I feel nothing at all.
Growth bears though – they feel the Pain Trade. Yesterday’s ramp in the Nasdaq and SP500 took their prices to within -0.5% and -1.5% of their all-time highs. Total US Equity Volume #accelerated +17% day-over-day and +21% vs. the 1-month average too.
Price Up, Volume Up, Volatility Down. Confidence almost always rips when US #GrowthAccelerating is driving that, for sure.
Our immediate-term Global Macro Risk Ranges (intermediate-term TREND views in brackets) are now:
UST 10yr Yield 2.36-2.59% (bullish)
SPX 2 (bullish)
RUT 1 (bullish)
NASDAQ 5 (bullish)
VIX 10.55-13.52 (bearish)
USD 98.80-101.25 (bullish)
EUR/USD 1.06-1.08 (bearish)
YEN 110.01-114.25 (bearish)
Oil (WTI) 47.12-49.66 (bearish)
Gold 1 (bearish)
AAPL 139.15-144.13 (bullish)
AMZN 845-860 (bullish)
FB 139-143 (bullish)
GOOGL 830-865 (bullish)
BAC 22.04-25.20 (bullish)
RLGY 28.00-30.44 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
