The New York Fed Staff Nowcast stands at 5.1% for 2021:Q2.News from this week’s data releases decreased the nowcast for 2021:Q2 by 0.2 percentage point.Negative impacts from ISM manufacturing survey and employment data accounted for most of the decrease. Nowcasting Report - FEDERAL RESERVE BANK of NEW YORK (newyorkfed.org)

The BLS recorded a payroll of just 266K in April, a huge miss compared to the consensus estimate of 1 million. Overall employment is 8.2 million workers below its pre-pandemic pace, thanks to April's disappointing payrolls. The labor participation rate also disappointed, coming in at 61.7 percent, slightly higher than the 61.6 percent forecast but … Continue reading 4 Ugly Job Data Points →

The interconnected relationships between certain economic variables and the subsequent climate in the financial markets are presented in Financial Physics. This study breaks down the components of Total Return and examines the possible returns for the remainder of the decade. Returns would most likely fall short of the historical average if valuations (P/E ratios) continue … Continue reading Dissecting Returns →

Even a 20-year investment horizon does not guarantee historically-average total returns in the stock market. The degree of valuation (P/E) at the start of the period determines the returns. When the stock market P/E is above average, investors' returns have been below average for the next 20 years. When P/E is low and below the … Continue reading Generational Returns →

The difference between average and compounded returns for investors is depicted in this graph. The effect of negative numbers and the impact of uncertainty as determined by the variability within a series of returns are the two concerns examined. Both of these problems have the potential to devastate investors' actual returns as compared to the … Continue reading Only compounded returns can be spent, not average returns →

The four market valuation indicators that are commonly used are: The Crestmont Research P/E RatioThe cyclical P/E ratio using the trailing 10-year earnings as the divisor The Q Ratio, which is the total price of the market divided by its replacement cost The relationship of the S&P Composite price to a regression trendline The Average … Continue reading How overvalued is the market →

Thanks to Warren Buffett, Market Cap to GDP has become a common long-term valuation metric in recent years. Back in 2001, he remarked in a Fortune Magazine interview that "it is probably the best single measure of where valuations stand at any given moment." The odd numerator in the chart title, NCBEILQ027S, is the FRED classification for … Continue reading The Buffett Valuation Indicator →

The NY Fed Nowcast for the 2nd quarter is 5.28%. Link: Nowcasting Report - FEDERAL RESERVE BANK of NEW YORK (newyorkfed.org)

Property busts have occurred after booms in 1971, 1989, and 2007, all following the 18-year trend. With this exceptional precision in cycle estimation, we must believe that the current real estate boom in the United States will continue until 2025! We could speculate that the pace of the outright speculation stage of the cycle has … Continue reading Will US property continue to rise? →

During the COVID-19 pandemic, the services sector took a beating. Small companies were especially hard hit, and many were forced to shut down. According to the data, from the NY Fed, 35% of businesses that were open prior to the pandemic are still closed. In early April 2020, the number of closed businesses peaked at … Continue reading Small Business and Rehiring →