STOCK MARKET....Today, Brinker chose several old Moneytalk calls that back up his current stock market views..... (Which is no change from fully invested, but he recommends a balanced asset allocation for those near or in retirement. NOTE: Brinker is expecting the market to register several new highs this year, but would view a short-term correction as a "favorable development."
MARKETIMER APRIL ECONOMIC ANALYSIS....In the April issue of Marketimer, Brinker reviewed the five root causes of a bear market. These indicators are part of the information Brinker uses in his "timing model."
Indicator data and paraphrase some of Brinker's conclusions:
==> TIGHT MONEY.....The Federal Reserve is using a 2% target for inflation.... and has raised interest rate twice since December 2016, but even so, they still have a "highly accommodative" Fed Funds rate - now in the 0.75% to 1.0% range....if the economy continues to grow moderately, Brinker expects the Fed to raise rates two more times this year.....The Federal Reserve is on record stating that "gradual adjustments" are to be expected going forward.
==> RISING RATES.....The FOMC is on record estimating that Fed Funds rates will gradually increase until it reaches an equilibrium of about 3%......the latest projections are for them to rise to 1.38% by the end of 2017; 2.43% by the end of 2018; and 3% by the end of 2019.....
Brinker said he continues to monitor the yield curve, which remains in an uptrend...."The absence of an inverted yield curve strongly suggest that the economy will remain in its moderate growth path." Over the past half-century, an inverted yield curve has served as the underpinning for recessions.==> HIGH INFLATION....The PCE price index (Fed's favorite), continues to show overall inflation below the Fed's target of 2%.....The FOMC median forecast for PCE inflation for year-end 2017 is 1.9%, and long-term forecast is 2%.
==> RAPID GROWTH....Brinker estimates a moderate, but slightly higher growth rate for 2017. He said: "We estimate real GDP growth for calendar year 2017 will be within a range of 2% to 3%, with a midpoint estimate of 2.5%......" Brinker's estimate is higher than the Federal Reserve estimate of 2.1%.....
.....The housing sector continues to gradually improve... New home sales rose 6.2% in February to a 592,000 unit annual rate. On a 12-month average basis, the sales rate is at its highest level since August 2008. The median new home price rose 3.8% year-over-year.
==> OVERVALUATION.....Brinker estimates 2017 S&P 500 Index operating earning within a range of $129 to $131....and maintains a price/earnings valuation range of 17 to 18 times operating earnings. Stock market valuation is still below the 1999-2000 bubble level where the S&P reached about 30-times operating earnings at the peak in the first quarter of year-2000 - which was followed by a 49% bear market.
Honey EC: So it looks like all is well in the economy and no bear market looming, at least until valuations, interest rates, and/or inflation spikes.
MONEYTALK RE-RUN COMEDY....Brinker found an old call (I remember laughing the first time it aired) where he says he has no political bias. He preached about how "both parties" have their radio pundits who receive talking points every morning and go on the air to sell them. But - the big one - claims that he does not do that. He claims that he has no "dog in the hunt," has no political-party bias, and that he is registered Independent.
Radio Stations:
710KNUS Denver
WNTK KION 1460 Monterey
63 comments:
Brinker usually takes a vacation day when the final round of The Masters golf tournament is being played, so I did not expect him to be live today.
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Same here, Jim.....If I recall correctly, he worked last Easter, so will likely work this one too.
Honey, Ha, I used the point today that you made long ago: If he does NOT announce the 800 call-in number in the first sentence or so, then it is not Live Bob, it is Fake (Memorex) Bob.
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To the man who is not my son-in-law....Thank you! :)
Thought we were seeing a trend of a string of "Live:"shows but today's broadcast changed that. (Apr 09) more recycling of old material... some information still relevant but sort of like reading an old newspaper.... whats the point?
As I write this,... the show has another 30 mins or so. If the show were live today, Bob would absolutely mention the Hole in One at the Masters today... that is a BiG Deal!!!! especially to a golfer like Bob.
Honeybee said:
"Bob Brinker's Moneytalk: Re-Runs and Spliced Old Calls - Honey's Brinker Update"
Bob is "So Yesterday". Yessiree, we all long for those repeat "classic" calls, played over and over and over again.
I wonder if any fans have ever visited Antiques Roadshow and brought old tapes, M/T rags, coffee cups, trucker caps etc. to get an appraisal.
Most of the appraisers are pretty nice but I think they would be highly offended if anyone drug all that crap into the show thinking there might be some intrinsic value. No doubt the appraiser would (nicely) ask the THAT Bob fan to leave the premises immediately and never come back.
MAD: These ancient calls, presented as new, makes me (almost) long for one of his angry feminist co-hosts from yesterday.
Failing that, I'm sure there must be dozens of knowledgeable, pleasant, non-political hosts out there that wouldn't mind filling in for him once or twice a month.
Honey, per your summary: I laughed at his "I don't have a political bias" also.
And who was the caller today who praised him for four different "virtues" that were laughably untrue? I can't remember what she said, but they were funny.
Honeybee, you are welcome. My pleasure. Thank you for making it so; it's a weekly joy!
Paul
Did Bob actually SAY 'he had no dog in the hunt' ? That, if so, is a mixed metaphor of 'no dog in that fight' and 'that dog won't hunt'. I thought Bob was smarter than that..
rasputin here: The very generic opening monologue tipped me off.
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Thanks for the kind encouragement Paul....And I do appreciate the donation.
I do subscribe to the newsletter so that I can be sure what is being said matches up - if you know what I mean...Nuff said....
So I decided that readers might want to help me pay for it and a few other incidentals via voluntary donations.
WINNER! Congrats to blog contributor Howard who last week predicted that Brinker WOULD NOT be "alive" on-the-air during the final round of the Masters golf tournament.
Bob musta loved the playoff hole that was required because it made calling in sick worth it. Too bad it was over in one shot when Rose shanked his drive into the woods.
Only caught 2 hours while replacing the front brake pads on wife's car in the driveway. Thank goodness the God-like worship calls selected for re-hash were reduced a bit.
My only beef about reruns is that half of the airtime is wasted by "Goober in Green Acres" absolutely re-writing the Gutenberg Bible with Bob as the central character. I mean, it's like these guys never read a Money magazine, a Kiplinger Letter (in any library), or a click-bait sidebar at ESPN Sports. They praise BB for his simplistic advice like he's the Second Coming.
Come on, guys, START READING!!! (Or forever be doomed, but that goes without saying.)
Honey, thanks for the info you share.
Smokey
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DRS...I'm not 100% certain he said "hunt," so could be wrong on the word since I wasn't re-playing the audio tape like I usually do when writing regular summaries.
Geo-political events continue to dominate and effect market performance while fundamentals take a back seat!
Barn performance was minimally successful much to my disappointment.
Gabe
Market volatility on steroids!
Gabe
Gabe: At 2:45 PM EDT, the broad market is up .2%, the Barclays total bond market index is up .08%.
You call that volatility?
Do you remember 2008, when many days the Dow dropped 300-400+ points in an hour or two?
Bluce: Intraday, the Market was volatile!
Thanks,
Gabe
Gabe: I didn't see the market from late morning til around 2:30 or so. How far was it swinging?
Brinker reviewed the five root causes of a bear market. These indicators are part of the information Brinker uses in his "timing model."
Snort. How does BB's "5 root causes" theory turn into a workable "buy or sell" metric? He's putting his finger in the wind. Snort again.
There exist objective, measurable, metric-based methods of market timing. Right or wrong, at least a method should clearly predicts a primary trend, up or down. I use IQT method (currently predicting UP and will remain so until the limits are crossed on all three metrics below):
DATE TREND DOWYIELD% OVERVALUE% UNDER/OVERVALUE RATIO
Limits <2.2% <17% <2
1 Feb: UP: 2.40%, 17.8%, 65/42 = 1.55
15 Feb: UP: 2.36%, 15.7%, 64/37 = 1.76 (<17% flag)
1 Mar: UP: 2.32%, 14.8%, 68/35 = 1.94
15 Mar: UP: 2.32%, 14.4%, 67/33 = 2.03 (>2 flag)
1 Apr: UP: 2.36%, 15.3%, 61/35 = 1.74 (<2 no flag)
So the current trend is UP and the metrics are:
1) Dow Yield is still above 2.2% (no flag).
2) Undervalued select blue chips now below 17% (flag)
3) Overvalue/undervalue ratio is still below 2 (no flag).
It takes all 3 flags to call a bear market. We only have 1/3. So I'm still mostly in.
IMO the most important element about market timing is the PRIOR commitment to metrics. So no matter how raging the bull or terrifying the bear, I don't care and just follow the pre-established rules. Unlike BB!
Bluce: A great deal. Perhaps someone could spew some numbers and percentages!
Thanks,
Gabe
Gabe said (referring to intraday market volatility): "A great deal! Perhaps someone could spew some numbers and percentages!"
Yesterday the S&P traded in a range between 2351.50 and 2366.37. That's +0.46% to -0.17% based on the previously close of 2355.54.
MK: Do your metrics all use the Dow?
Overall, a rather bearish day so far.
However, it is interesting to note that $RUT is up +.24% as I post. An outlier, I suppose.
However, if we see a string of days when the NAZ and Russell are both up on outsize volume, that might be a bullish sign.
Obviously there are many national and international concerns currently. However, since we are beginning earnings season, I am hopeful that we see a good percentage of earnings beats. If we do, I think (hope?)the market might get back on track.
JC
Biker: Thanks! Well...Volatility is in the eye of the beholder! Thank you again for your input.
Gabe
Gabe's Volatility Watch:
https://abnormalreturns.com/wp-content/uploads/2017/04/VIX_0417.png
JC
From the "This is not good." department:
Business media has its own fake news problem
https://www.axios.com/business-media-has-its-own-fake-news-problem-2353912512.html
JC
A 2.30 10 year! Wow!
Gabe
TAX WEEK show!!! Barbara Weltman in the third hour bullpen SHIFTY in SKOKIE
HIGHWAY ROBBERY!
Honeybee,
Did you know that the new gasoline taxes imposed by Führer Jerry Brown Scheiße is linked to inflation? Initially I thought it was "only" a fixed increase of $.18 per gallon, but that is just the starting point! They are already projecting $.20 in 2018 - and who knows what after that. And we both know that little (if any) of the money will find its way to actually fixing our third-world freeways (that probably won't be free much longer).
I am seriously thinking about selling my car and taking out a rental whenever I need transportation. I ran some quick numbers - it looks like I would be saving $4-5K a year by doing that. Of course the "big if" is how much will the rental companies jack up their rates.
Another solution (and one I am considering more seriously of late) is to relocate to one of other the 57 states formerly under Obama's control.
This B.S. makes me Mad as HELL!
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Mad....I love where I live - it's gorgeous, but at times, I think I would leave the state if I could get my family to go with me. That isn't going to happen.
A lady doesn't use the words that would describe what I think of Sacramento-Brown.
Honeybee,
As always I very much appreciate your demure, ladylike manner.
From a guy's perspective, I think your unspoken feelings may be something along the lines of:
"Jerry saco de caca barrón"
Rasputin: You're too kind!
Thanks!
Gabe
The real rasputin here...hmmm.
Not to take anything away from you gabe, but that wasn't this rasputin. Identity theft, I tell ya'.
I'd probably say, "It's like taking a finance course high." But that's just s t me.
It's all good.
MAD: Not that I wouldn't mind having you for a neighbor, but don't bother moving to NYS. It has to be the 2nd worst state.
I would love to leave, but my family has roots here going back to around 1802-1803.
Bluce,
You folks need to band together and get Rudy in as Governor. He will kick arse and take names!
As for California, we unfortunately haven't had a competent Governor since Ronald Reagan*. His second term as Governor ended in 1975. So, we have been without competent leadership for 42 years! Yea...that can cause some problems!
Argh! :-(
* Ronald Reagan: The BEST Governor - EVER!
* Ronald Reagan: The BEST President - EVER!
If ex-govs can run for president, can ex-presidents run for Gov? I think Hillary for NYC mayor. Bill for Gov of NY. Gotta pave the way for the worthless kid that never had a real job to take over.
(now where did I hear that line before.................)
MAD:
NYS is amazing, although I suspect CA is probably similar. If you look at a map after an election the entire state is red (Republican) except for the large urban areas: NYC and much of LI, Buffalo, Rochester, Albany, Syracuse and of course the Communist enclave surrounding Cornell college (Ithaca).
NYC has around 9M people, and there are about 9M in the rest of the state, much of that of course is in the other urban areas as mentioned above. So the left controls everything except our county and town govs, which are quite conservative regardless of which party has a majority.
The only GOP govs I can remember are Rockefeller when I was a kid and Pataki back in the '90s, both worthless liberal Republicans -- although Pataki was certainly better than Super Mario.
NYS is a lost cause, limping along behind CA.
Molten Metals Market today:
http://stockcharts.com/freecharts/sectorsummary.html?&G=SECTOR_DJUSST&O=1
JC
The Dow has lost over 500 points since its high! Not good!
Gabe
Yes, Shifty in Skokie is making an accurate prediction about Ms. Weltman visiting Bob during the "last chance" week to file tax returns on time, or face Uncle Sam's wrath.
She's here every year! It's always a party as Bob tries to act like he knows more than she. But he always fails, just as the daylight is getting longer and the gardenias are in bloom with their pleasant perfume. It's all so fun!
Mr. Shifty, good call.
Rod
Gabe: The Dow is 2.36% off its record high. If this has you worried maybe you shouldn't be in stocks.
Bluce: Perhaps, you need to avoid making conclusions and accept my note as only an observation.
Gabe
Gabe: A week or so ago you were hoping for a correction. Now you say that a 500 point drop off the high is "not good."
I'm just trying to figure out where you're coming from.
Bluce: For what its worth... I closed out my short and made a few bucks! Again, my previous note was an observation. Long term I am bullish, however, in the short term, it is interesting that the market does not move higher on positive news such as today. Something to take note, if the market closes down. Again, an observation.
Gabe
frankj: MK Do your metrics all use the Dow?
3 metrics are used; only one uses the Dow (the Dow dividend yield).
The remaining 2 use select blue chips.
Interest rates at 2.22% ......10 year!
Gabe
Frequently, the market closes up on the day preceding a holiday. Not today though.
YTD, my holdings are still positive. But a few more days like this will put me into the negative column.
I think the market overreacted today to the dropping of "MOAB" upon the noggins of ISIS terrorists. (Actually, that should be a cause for celebration in my opinion).
However, moving elsewhere on the map I am increasingly concerned about the little fat boy (LFB) with a bad coiffure. This weekend North Korea celebrates the 105th anniversary of the birth of its founder Kim Il-Sung, and LFB has pointedly informed journalists and others to "prepare for a big and important event."
LFB's blusterous blabberings are subject to various interpretations. Could be a fake-out. Or perhaps not.
JC
MOAB
Does this mean that "MOABO" is another THAT Bob brinker-bomb?
Gabe, thanks for the clarification. :)
Jerrod: You're heading for negative territory YTD?
FWIW, YTD:
S&P: +4.03%
Total bond market: +1.18%
VG balanced index, VBIAX: +2.80%
It is a crap shoot with this current market! Stock fundamentals play a less important role and geo-political events a primary role.
Flip a coin each trading day!
Gabe
Bluce,
Two U.S. Total Market ETFs are involved:
- Both were first purchased on 1/27/17.
- Intermediate purchases were made between 1/27/17 and 3/29/17.
- Last purchases were on 3/29/17.
- Both Total Market ETF's are currently under-performing SPY.
- SPY and my two ETF's have all breached their respective 20-day EMA and 50-day MA. (Not good news!)
- However, the "good news" (if any is to be had) is that all three are approaching "oversold" territory.
If I don't see noticeable improvement in the next few days I may decide to "fold 'em".
http://stockcharts.com/h-sc/ui?s=SPY&p=D&b=5&g=0&id=p01905407430
JC
Jerrod: I guess I don't get you guys who are jumping in and out all the time.
My B&H 44/56 portfolio has a beta of .4 and tracks that surprisingly close. So far, YTD, it is handily beating .4 of the S&P.
Even for one year and missing much of the Trump rally (because of a low volatility stock ETF) I am ahead of .4 of the S&P.
Oh well.
JC: Perhaps trading costs are impacting your portfolio!
Gabe
Jerrod: I don't know. I don't worry about short term stuff -- YTD (3 months), or that I "missed" the Trump Bump -- but I expect my portfolio to do roughly half or a bit less than the broad stock market. If it wasn't, after a year or so, I would reassess what I was doing.
But I don't know your personal situation, so you may have a totally different perspective than I do. My portfolio, along with SS, will be my sole retirement income (coming within the next few years) -- so I take it quite seriously.
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Message to Gabe: Thank you!
HB: My pleasure!
Gabe
Thanks for posting Frankj's book report on Black Edge. I am almost finished reading it and must concur that it's a must read!
Cheers, Mike
Hey All!
I've had some trouble getting the podcast to download from KABC for the last month or so.
Anyone else getting the podcast from KABC?
Have they stopped posting the podcasts?
Thanks!
Doodle
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