Worrisome trends

In the next issue of 3/6/2016 of The Peter Dag Portfolio I will discuss three worrisome trends - for the economy and the financial markets.

The above graphs show inflationary pressures in various sectors of the economy. The trends are up and the economic and the investment implications are of paramount importance.

Any serious investor and strategist should be aware of these important emerging trends and its implications on bond yields and equity markets.

You will encourage me to update this blog on the economy and financial markets by entering a subscription to The Peter Dag Portfolio.

Thank you for visiting this site.

George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets

Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period, and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.

The problem with the economy

The problem with the economy is that business is not investing in new productivity improving capacity (see above chart, shaded areas indicate recessions).

Can the economy grow strongly with declining corporate investments in new machinery and equipment?

This trend has a major impact on commodities, earnings and equity prices.

You will encourage me to update this blog on the economy and financial markets by entering a subscription to The Peter Dag Portfolio.

Thank you for visiting this site.

George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets

Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period, and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.

Slower growth ahead?

The yield curve (red line) is flattening. The blue line represents the growth in consumer spending.

The shape of the yield curve, an excellent leading indicator of the economy, points to slower growth in consumer spending and the overall economy.

These trends will have a major impact on commodities, crude oil, and earnings.

You will encourage me to update this blog on the economy and financial markets by entering a subscription to The Peter Dag Portfolio.

Thank you for visiting this site.

George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets

Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period, and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.

Observations

There is only one way to say it – it is crazy. What is

happening is incredible. Up 300 points on the Dow. Down

300 points the next day. Investors are nervous,

uncomfortable about where we are heading. EU banks down

 5%. Sinking energy and financial stocks. There is a

 big problem out there. Add to all this a Fed which is

tightening with manufacturing in recession and taking the

rest of the economy with it. There is only one way to put it

– be careful. 

 

The Fed wants to push rates higher with long yields sinking

and the yield curve flattening, pointing to even slower

growth. Rising financial risk adds to the grim uncertainties

facing the markets. This environment will continue to

depress EPS. 


You will encourage me to update this blog on the economy

and financial markets by entering a subscription to The

Peter Dag Portfolio.


Thank you for visiting this site.

George Dagnino, PhD

Editor,

The Peter Dag Portfolio

Since 1977

Author, Profiting in Bull and Bear Markets

Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period, and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.

 

 

 

 

 

 

 

 

 

 

The economy - slowing down

This is the latest piece of information confirming the economy is weak. Followers of this blog know very well we have been consistent on this point.

The weakness of the economy is reflected in low inflation, weak commodities, low yields, and poor profit performance.

All these trends have a defining effect on the equity market.

You will encourage me to update this blog on the economy and financial markets by entering a subscription to The Peter Dag Portfolio.

Thank you for visiting this site.

George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets

Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period, and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.

A bear market indicator

I watch closely the HMI - the homebuilders confidence index.

It is an excellent indicator to flag major market tops as it did in 2006.

A decline of several months in the HMI (see above graph) points to a major bear market. This is one of the reliable indicators I follow closely. 

You will encourage me to update this blog on the economy and financial markets by entering a subscription to The Peter Dag Portfolio.

Thank you for visiting this site.
George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets

Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period, and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.

Heading for a recession

I review this chart in almost every issue of my The Peter Dag Portfolio. It shows an important relationship between sales and inventories.

The point is very simple. When sales rise more slowly than inventories - as they are doing now - business will have to reduce production to bring inventories in line with sales.

The outcome is lower economic growth, weak commodities, lower yields, and weak EPS.

You will encourage me to update this blog on the economy and financial markets by entering a subscription to The Peter Dag Portfolio.

Thank you for visiting this site.
George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets

Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period, and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.

The bear market will end when....

The above chart shows one of our indicators measuring financial risk. Financial risk has been rising since the beginning of 2015. And since 2015 the market has performed poorly.

The same pattern you see in 2008-2009. And you know what happened then.

The bear market will end following a visible decline in our financial risk indicators. We review them in each issue of The Peter Dag Portfolio.

You will encourage me to update this blog on the economy and financial markets by entering a subscription to The Peter Dag Portfolio.

Thank you for visiting this site.

George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets

Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period, and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.

Recession ahead?

The red line shows the shape of the yield curve. The yield curve keeps flattening (the red line is declining).

Note: peaks and bottoms in the yield curve lead by several months peaks and bottoms of consumer spending (blue line).

Bottom line - because of the flattening of the yield curve the odds favor a major slowdown in consumer spending.

Implications - weak commodities, lower EPS, stable or lower Treasury bond yields, and stocks going nowhere at best.

You will encourage me to update this blog more frequently on the economy and financial markets by entering a subscription to The Peter Dag Portfolio.

Thank you for visiting this site.

George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets

Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period, and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.

Bear market signal

The above graphs show financial risk is soaring  among European banks (source: ZeroHedge).

The Peter Dag Portfolio regularly documents the change of several proprietary indicators measuring financial risk.

Financial risk measures are crucial for stock market investors. A rise in financial risk is a reliable signal which has always preceded bear markets.

You will encourage me to update this blog with my assessment of what is happening to the economy and financial markets by entering a subscription to The Peter Dag Portfolio.

Thank you for visiting this site.

George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets

Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period, and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.