The Independent Market Observer

Is Now a Good Time to Invest in Energy?

July 31, 2015

With oil prices down as much as they are, many investors are asking whether now is the time to buy. “Buy low, sell high” makes a lot of intuitive sense, and with prices low, buying looks like a good move.

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In the News: The Fed and GDP Growth

July 30, 2015

In the past 24 hours, there have been two pieces of news that tell us a great deal about the economy today and also show us how things are likely to evolve over the next year or so.

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Where Is the Wage Growth?

July 29, 2015

In my post on Friday, I noted that employment is, in many ways, approaching boom times. Although it’s not there yet—the proportion of part-time jobs and the level of high-paying jobs continue to be concerns—employment is moving in the right direction and doing so at an increasing rate.

The missing piece here has been wage inflation. If things are so good, why aren’t we all making more money?

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China’s Stock Market Plunges Again (But Not to Worry)

July 28, 2015

It turns out that China’s stock market remains a market after all, despite the Chinese government’s best efforts. Prices on the Shanghai Composite Index fell 8.5 percent on Monday and another 1.7 percent Tuesday, stripping away more than half of the gain since the last bottom.

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Monday Update: Better U.S. Economic Data Points to Continuing Recovery

July 27, 2015

After discouraging news the week before, last week’s U.S. economic data came in generally positive, suggesting that the economy continues to move forward despite ongoing headwinds.

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Employment: Partying Like It’s 1973

July 24, 2015

I’ve been saying for a while now that the employment market is approaching boom times, and the initial jobless claims number that came out yesterday backs me up. The number of people who filed new applications for unemployment insurance dropped to a 41-year low this past month, down to a level last seen in 1973.

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Appearance on CNBC's Power Lunch, July 23, 2015 [Video]

July 24, 2015

Although my expectations are for slower growth in the economy, this is actually a positive thing for stocks in the long term. Where are the areas of potential opportunity for investors? Hear what I discussed in an appearance yesterday on CNBC's Power Lunch program

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Social Security Faces Its First Reckoning

July 23, 2015

Not that long ago, we were discussing the inevitable financial collapse of the U.S. Deficits were through the roof, so was the debt, and all that remained was to find out just how it would end, with a bang or a whimper.

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Is Hillary Clinton Going to Raise Capital Gains Taxes?

July 22, 2015

Several readers have reached out to me regarding news articles with headlines like “Clinton to Propose Increasing Capital Gains Taxes,” wanting to know the implications of this and what we should do.

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Investing in Gold: Don’t Rule It Out

July 21, 2015

Here at Commonwealth, I’m considered the resident gold bug. In investing, that’s someone who looks to gold as a safe investment, a guarantee against systemic failures, and who is typically bullish about the price of gold.

I don’t actually fit that description, as I’m neither bullish on gold at the moment, nor do I think gold is a safe investment, nor am I a disaster buff looking to use gold as a hedge. I am, however, one of relatively few people in the firm who are even willing to consider using gold in a portfolio in a significant way.

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Monday Update: Disappointing U.S. Data, Encouraging International News

July 20, 2015

Last week brought a slew of disappointing economic data releases that, together, suggest the U.S. recovery may be slowing. On the bright side, international concerns died down somewhat.

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Thinking Ahead: The Next Major War

July 17, 2015

For some reason, when things are good—and they are—I start thinking about the next set of problems. Call it the Eeyore mindset, or just a deep need to try and see around the corner. This gets me into trouble sometimes, as I usually identify five out of every three problems that show up. But to the extent that it lets me think through issues before they become urgent, it’s usually a helpful tendency.

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A Closer Look at the Chinese Stock Market

July 16, 2015

For all the media coverage of China lately, Western knowledge of these markets—and the ability of U.S. citizens to invest in them—is actually quite limited. As the recent crash has shown, we need to learn more about the Chinese stock market, particularly given that Western firms are increasingly looking to include Chinese companies in their indices.

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Is U.S. Economic Growth Headed for a Slowdown?

July 15, 2015

Based on the retail sales data that came out yesterday, it’s time to take a serious look at the prospect that U.S. economic growth is slowing down.

I’m not suggesting that we’re moving back into a recession—just that growth is quite possibly slowing below expectations, and an acceleration may not be coming any time soon. We need to consider why that might be.

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Amid Turbulence, Global Financial System Stays Steady

July 14, 2015

It’s been an interesting couple of weeks, to say the least.

In the words of Lenin, someone I don’t normally quote, There are decades where nothing happens, and there are weeks where decades happen.” These past few weeks have seen a great deal of change around the world.

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Greek Debt Deal Looks Like a Temporary Fix

July 13, 2015

The headlines this morning are all about the Greek debt deal that European leaders hammered out over the weekend. Good news, I suppose, but as usual, the devil is in the details.

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Monday Update: U.S. Posts Solid Data, China and Greece Settle Down

July 13, 2015

Last week was relatively quiet in U.S. economic news, but the news we did get was generally encouraging. Once again, the top stories came from abroad, as China’s market stabilized and Greece moved closer to exiting the eurozone before reaching a deal over the weekend.

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Policy Maneuvers Losing Power to Steer the Markets

July 10, 2015

Every year or so, I do a postmortem of my analyses and predictions in order to figure out where I was wrong, and how to avoid making those mistakes in the future—a useful, albeit uncomfortable, exercise. One of the biggest mistakes I’ve made in the past decade has been to underestimate the power of governments to influence markets.

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Chaotic Day in the Markets: A Reminder to Plan Ahead

July 9, 2015

Yesterday was a rough one for financial markets across the board. China’s markets dropped again, U.S. markets fell in sympathy, and the New York Stock Exchange shut down with technology problems. It’s the end of the world as we know it!

Or maybe not. Although there are reasons for concern, U.S. investors shouldn’t be too worried—as long as they’ve planned ahead for an eventual downturn.

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Economic Risk Factor Update: July 2015

July 8, 2015

Once again, it’s time for our monthly update on risk factors that have proven to be good indicators of economic trouble ahead. As expected, the data hasn’t changed much from last month—it remains positive in all areas and has continued to improve in many cases—but it’s still important to keep an eye on things.

Heading into July, though, the economic forecast remains sunny.

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The Chinese Stock Market Decline: What It Could Mean for the U.S.

July 7, 2015

As I mentioned yesterday and in my monthly Market Thoughts video, I’m worried about Greece, but in many ways, I’m more concerned about China. We know about China’s slowing economy and the need to transition from infrastructure- and export-led growth to consumer-driven growth, but these are long-term trends and were basically going well.

What’s new—and worrying—is the boom and subsequent plunge in the Chinese stock market.

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Monday Update: U.S. Solid, Greece and China Rock Markets

July 6, 2015

Starting today, I’m introducing a new format for my Monday posts, briefly highlighting key stories from the past week plus items to watch in the week ahead. Of course, I’ll continue to provide more detailed analyses of major topics throughout the week, as situations develop.

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Market Thoughts for July 2015 [Video]

July 6, 2015

In my latest Market Thoughts video, I discuss recent difficulties in the U.S. financial markets, as well as ongoing problems in Greece and China. I also provide an update on U.S. economic performance in June.

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The Truth Behind the 7-Year Market Cycle

July 2, 2015

One of the things I’ve been meaning to do this summer is take an analytical look at the Shemitah, a quasi-biblical prophecy that predicts a crisis every seven years—which means the U.S. is due for “financial ruin” this year.

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Could What’s Happening with Greek Banks Happen Here?

July 1, 2015

Yesterday, a reader wrote in with a question about what might happen to a U.S. citizen’s deposit in a Greek bank. I don’t have the answer, but the question made me think about U.S. bank deposits, which led me to imagine what the next wave of doom-and-gloom commentary here in the U.S. might be.

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