Category Archives: Macro

A 460 point decline in the DJIA still gives me sticker shock, for back in the day that was a big move. Yesterday the S&P 500 fell 1.9%. Such ought not be a big deal. When you checked your portfolio…did you get a sick in your stomach…

No one has been more out of step with asset markets this decade than me. As Warren Buffett recently said, “Prices are sky-high for businesses possessing decent long-term prospects.” ( The Felder Report ). Unfortunately that’s not a good…

Global Investment Returns Yearbook 2013 by Credit Suisse . Why is US Oil Consumption Lower? Better Gasoline Mileage? at TOD . The unsaid answer in the excellent piece is price. Meanwhile, Chinese oil imports are going the opposite…

Gold Miners Are Just Doing What Miners Do by Toby Connor . ISA typically avoids the promotional, but the essay makes a super bullish case. Note the precious metal complex was higher in Monday’s down stock market… A look at our place in the…

The DJIA is 1.9% below its all-time closing high ( Bespoke ). Weekend Thinking Out Loud by J.C. Parets . Upside Risks by Josh Brown . No doubt currency wars and printing are a driver ( Bloomberg ). “The second installment of the 2012…

Traders, Who are You ? Kirk Report The bond kings head to the stock market. Reuters The amazing yield conundrum at Scott Grannis . Household debt service payments as a percent of disposable personal income is falling markedly. St. Louis…

The stock market’s secular and cyclical position discussed in Barron’s and by Josh Brown . S&P 500 Fair Value Update at Value Plays (Has the shift in income to capital from labor permanent? Or is it a function of the credit bubble?). 2008…

In a world of fiat money, perhaps everything is a speculation. NY Times Interest rate risk is real ( Fortune ). The High Yield Market is “Completely Out of Control” at DDI . REITs: A word of caution ( Vanguard Blog ). US 10-Year Yield…

Don Coxe’s final Basic Points . Everyone should read this; I recommend printing it… With usual wit, Jim Grant survey’s the monetary environment and takes a good look at Google and General Motors too. Grant’s Pub For the more serious…

ISA operates under the theory the stock market continues in a secular bear market which began in 2000. Strangely, the Dow has only had one negative year (’08 down 35%) the past 10 years. The Dow was down a rare three years in a row from…

Unless a speculator is into checking Congressional members’ Facebook updates for trading purposes, there is not a whole lot happening. “It is very rare that any top-performing sector in a given year can repeat that market-leading…

Q4 GDP is Tracking Very Weak…. ( Pragmatic Capitalism ). Yet last week U.S. third quarter GDP growth was revised up to 2.7% growth ( Marketwatch ). Now, manufacturing is struggling to gain traction ( economists view ). And I spent the…

Bearish commentary is everywhere the investor turns, such as Technician Alan Newman: I’m As Bearish As I’ve Ever Been and Charles Biderman is not feeling your dead cat bounce . John Hussman has a weekly piece which is well reasoned and…

Today the investor can waste time watching ‘business news’ being reported from the mall, or you can spend 15 minutes with Independent Stock Analysis: NatGas Inventories Begin Falling Fast, Cold Snap May Send Prices Surging Above $4 Fast at…

Thirty four shale gas reports: No Hot Air . ISA believes the promise of Iraqi oil will always remain an empty ( Business Insider ). And as for California shale oil, well, good luck trying to drill 10’s of thousands of wells on on 10 acre…

Being bearish is easy. The massive imbalances are well known and will end in tears. But reading Zerohedge everyday is hazardous to your wealth. First, An Old Friend: The Stock Market’s Shiller P/E is a must read for stock investors and…

This weekend the IEA released its World Energy Outlook 2012 , spawning a flurry of news articles. ISA is a shale believer, but much of the mainstream media know not what they speak: Maybe in a robust price environment : “The United States…

Independent Stock Analysis covers an awful lot of ground and two months have passed since we overviewed the landscape. Perhaps an updated survey would be helpful. In addition to specific stock opportunities, let’s consider natural gas…

I was away from the computer screen during the Friday market drubbing, but you can be sure I noted the gold stocks (and UPL) were flat on the day. Perhaps the title of this worthwhile essay should have been “ Buy Gold “: Will central banks…

Things I Don’t Understand by Grant Williams . Fantastic big picture investing looks: Part I and Part II . As a stock junkie with a penchant for market history, I always enjoy stories like The Copper King’s Precipitous Fall ( Smithsonian )…

Jeff Saut gave a great interview: King World News . A Letter To A Friend at Short Side of Long . The U.S. Federal government budget deficit problem clearly explained on YouTube . If only the author took the analysis one step further to…

What the Fed’s Historic Bet Means for You by Mohamed A. El-Erian . Kass: Still Short Bonds at The Street . Bill Gross monthly Investment Outlook. No wonder “…strategists have never been that bearish according to Bank of America Merrill…

Durable goods orders have slowed and second quarter GDP was revised to a pathetic 1.3% growth rate. Yet Two Reasons to expect Economic Growth to Increase ( Calculated Risk ) includes housing . “All the while, the market continues to grind…

The money quote from the Fed : “purchasing additional agency mortgage-backed securities at a pace of $40 billion per month… If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of…

Buying This Dip Historically Makes Sense at All Star Charts while Dennis Gartman Just Dumped All Of His Stocks ( AMP 2012 ). “Australia’s resources minister on Thursday declared the end of the country’s mining boom…” Reuters . Meanwhile…

Not mine, of course. I’m not here to tell you what to do. But first, I’d like to give a hearty welcome to the new members who joined yesterday and last night. As China manufacturing falls to 9-month low ( Globe and Mail ) and Europe…

Looks like Europe will be making headlines again “as meetings between Greece’s prime minister and euro-zone leaders this week loom.” WSJ But our interest is China centric: Are the forecasts for re-acceleration in Chinese growth accurate…

ChessNwine has become the top technical analyst I follow, and he’ll tell you the bulls have the initiative. Maybe stocks are poised for another melt-up rally ( Financial Sense ). Josh Brown posted One Direction 30 minutes prior to the…

Amid the European mess and weak emerging markets, the US has seen The Housing Recovery Strengthen at esoltas . Both Home Prices and Rents Rise at CNBC . Auto manufacturing and sales are a strong tailwind at the Detroit News . The good news…

Listening to the coal company management teams on their conference calls broach’s the surreal. The observer is left to figure out by himself the industry is depressed. Hope springs eternal with happy talk. Three things have kept natural…

“The number of Chinese online was already huge, and it’s soared over the past year by more than 50 million thanks to an upsurge in mobile Internet access.” CNET “…800 million to 1 billion new consumers around the world will enter the…

The chart is from the Economist . Future electricity generation demand just for air conditioning, and thus for coal, is wildly bullish ( Guardian ). Wind and solar are not going to get the job done. China is always the elephant in the room…

China Economic Growth Slows to 7.6% at Iacono Research . On and on they rant about China’s over investment. “China’s capital stock per capita is still only about a tenth of the United States” at the New York Times . The commodity complex…

Both energy and industrialization of China related: China to Cut Retail Fuel Prices at WSJ . “Car makers are falling over themselves to get a slice of the action in China, the world’s biggest market.” Telegraph The structural economic…

Oil Rebounds as Norway Strike Looms at Bloomberg . Statoil Prepares to Shut Down Production As Strike Continues at the WSJ . “Problem is, the rebound last year was fuelled at least in part by an average deficit of 800,000 barrels a day for…

Bank of England tacks on $78 billion to their printing program ( Marketwatch ). ECB cuts more rates than expected ( Marketwatch ). But China steals the show with a cuts ( Marketwatch ). One more take: FT Alphaville . Looks like the…

Oil Rebounds in New York on Global Stimulus Speculation , Iran at Bloomberg . The especially weak ISM manufacturing data yesterday was bullish, in a perverse way, because of a pavlovian market participant response to central bank easiness…

The Barron’s Falling Star piece (google the title to read the whole thing) generated excited commentary from mainstream bloggers including Josh Brown and FT Alphaville . We at ISA are goldbugs and regularly note crazy imbalances. Where you…

I do believe the safe route to profit from the gold exploration cycle is Franco-Nevada. FNV has a deep portfolio of royalty rights and the cash to invest in additional juniors prospects at favorable prices. Junior Gold Exploration at Zeal…

Yesterday a report by Leonardo Maugeri created big buzz in the oil and gas community. The Oil and Gas Journal actually used the ridiculous 17 million number in a headline. The executive summery forgets about price . The WSJ and economist…

Oil Trades Little Changed as Storm Threat to U.S. Gulf Crude Supply Fades at Bloomberg . Annual Energy Outlook 2012 (Only 252 pages long): EIA This would only be the tip of the iceberg: Oil price fall slowing oilfield activity at Calgary…

Gold Stock Valuations at Zeal . Note the deflationary period in Weimar marks relating to gold: Casey Research . About this gold consolidation since last August: Kimble Charting Solutions . A forty year silver chart with its recent…

Seems a binary event will occur on Wednesday with the FOMC meeting. Expectations are for more easing, the degree of which is very unknown. The rally over the last week shows dovish expectations; the precious metals complex today is quite…

Endless QE? $6 trillion and counting Reuters Easing Seems Likely, But of What Form? Financial Sense One British central banker say bond buying should be expanded: Bank of England should buy company loans at Reuters . Re-reading Bernanke’s…

Expect the Bakken boys to report stellar Q2 numbers: “April…was the largest year-over-year increase in the state’s history at 73.5%…) via Mark Perry . Also, The Bakken Buck Starts Here – Bakken Crude Pricing – Part II at RBN Energy . Lower…

All roads in Europe lead to gold: Chris Martenson . Bernanke and the data disappointed the goldbugs at Global Macro Monitor , but Gold reversed higher on Friday at Daily Gold . Have Gold, Silver, and Mining Stocks Bottomed? Minyanville…

If given the opportunity to export, U.S. E&P’s would destroy LNG pricing in short order. Natural gas reserves in the Economist . Long term chart of market capitalization as a percent of GDP: Ritholtz . Valuations, corrections and bear…

Western investors have been waiting patiently for China to stimulate so their stocks will go up again. Just be sure they follow through. Rather than compete against the Chinese, sell them what they need. Enjoy today’s industrialization of…

Eagle Ford human interest article: Fuel Fix As production ramps higher in a new play, operators get behind before a maintenance level of backlog inventory is found. The Eagle Ford backlog at Eagle Ford Shale . Crude oil and refined product…

Shale of the Century at the Economist . Price matters, as natural gas displaces coal at the EIA . Capital Destruction in Natural Gas by Testosterone Pit . The IEA put out a natural gas report: Global Natural Gas Demand to Rise Sharply at…

Yesterday the gold equities outperformed the S&P 500 by over 900 basis points . The stock market was clobbered and the precious metal complex spiked and then continued to rally. The drivers were the some poor overseas economic reports…

A paraphrased quote from yesterday: “ Investors just want China to ease already, so global stock markets will rally again .” We wake today to futures down over one percent and China slowdown worsens amid signs U.S. losing steam at Reuters…

Morgan Stanley’s Complete Outlook For The 14 Most Important Commodities In The World: Business Insider Bakken primer: Oppidan Usually industry is the punching bag of the politicians. Yesterday the API called the EPA out of touch with…

The strength in the materials names today? Stimulus via Business Insider How Strong is China’s Economy? Despite a recent slowdown, the world’s second-biggest economy is more resilient than its critics think. Economist The Global Middle…

Three ideas stand out in the investment landscape: 1) Peak conventional oil production is still real, with the higher price deck and technological advancements changing the game . 2) The industrialization of China and the emerging markets…

Gigantic pennant: JSmineset . An inverse head and shoulders breakout from Porter Stansberry . Official breakout via Jeff Clark . European weakness ( Sober Look ) will begat money printing. Easing options from Zerohedge . But will policy…

In China 17% of home purchases are done with cash, and “Buyers who use mortgages have a lot of skin in the game: the minimum down payment for owner-occupiers is 30% and 60% for investors.” If you read just one long piece this weekend, make…

Stock market junkies might call it risk-on and risk-off while the media references the news of the day. Some policymakers love to talk a tough game and many blatantly forge the easy path, but in the end they all fly like doves. The war…

The industrialization of China is a major theme at Independent Stock Analysis. Here are some recent data points and commentary. Note the negativity toward this meme by the mainstream press and credit bubble financial blogosphere. Even…

First I wrote a Seeking Alpha article to suggest replacing bonds with an income equity security and I received push back from mainstream investors. So I wrote a second article on the barbell strategy as a means to replace bonds without…

The world sure is advancing technologically at a robust rate. “Smart Phones and Tablets Might Be Spreading Faster Than Any Technologies in Human History” Mark J Perry Smart and hard working kids who made their own money funding the same…

Over the last three weeks blog postings here at Independent Stock Analysis have been coming at a rate of two or more every market day, plus one on Saturday. I am taking off Mother’s Day weekend for family time and a road race. Be sure to…

Last decade investors were concerned about the industry’s ability to produce oil and gas. Natural gas conventionally produced was on a treadmill running too fast and producers could not keep up, forcing the price ever higher. Natural gas…

Is the commodity supercycle ending? Diapason via Pragmatic Capitalism Answer: How fast will they spend and print? A look at the fiscal cliff with Sober Look . The Bakken players were hurt by differentials in Q1. Williston Basin production…

The backdrop thesis is the secular stock market bear market, beginning in 2000, coinciding with the commodity bull market starting near the same time. The fundamentals and valuations support this broad idea. Is the price action suggesting…

Four ideas stand out in the investment landscape: 1) Peak conventional oil production is still real, with the higher price deck and technological advancements changing the game . 2) The industrialization of China and the emerging markets…