The U.S. stock market may be in a bear phase, if so, how long might it last? How low might it go? (not far from here) What kind of recovery may be expected? (big double digit growth)

| September 26, 2011

Bull phases last longer than bear phases. The last two bull phases gained over 100% over an average of 1307 days.  The last two bear phases (2001 and 2009) lost an average of 46% over 396 days.  They followed “bubble” periods in tech stocks and housing and where “cash was trash”– this is not the […]

The 12 month forward P/E ratio for the S&P 500 is the lowest since 1987. It is 13% lower than the bottom in March 2009.

| September 25, 2011

The forward 12 month (“FTM”) P/E ratio for the S&P 500 is the lowest since following the crash in October 1987.  Since 1982, the early days of the era of low inflation and declining interest rates, the market has been up 100% of the time 12 months after the FTM P/E ratio has been 10.5X […]

Household debt burden is easing, now lowest in 17 years, close to levels of the 80’s

| September 24, 2011

Income has gone up, debt load has gone down . . . Household debt service as a percentage of disposable personal income is the lowest since 1994, also a period of economic recovery.  It is close to levels of the mid 80’s, yet again a period of economic recovery.  U.S. consumers have plenty of capacity […]

Consumer confidence headed for test of Great Recession lows. It was a positive contrarian signal then and is the same today

| September 24, 2011

Despite growing (albeit slowly) employment, improving earnings, and a declining personal debt burden, consumer confidence is testing levels seen in at the depths of the Great Recession in 2008/2009.  The last time sentiment was this low in the spring of 2009 the economy was shedding jobs at the rate of 700,000 per month.  The economy […]

News flash: Jobs are actually increasing although you wouldn’t know it from consumer sentiment

| September 24, 2011

The economy added 331,000 jobs last month according to the household survey of the BLS.  The same survey indicates 1.67 million new jobs have been added since the low point in December 2009.  While new jobs are being added, the economy is nowhere near full employment.  Recessions generally start from points of full employment, not […]

Households are still paying off debts, businesses are starting to borrow moderately, the US Treasury is slowing their rate of borrowing.

| September 24, 2011

Total borrowing in the U.S. is dramatically slower than any year since the mid 80’s with the exception of the lows in 2008/2009.  Even with high levels of US Treasury borrowing, the total borrowing has slowed as households have liquidated debts and businesses have cut back.  Recessions since 1970 have not started when borrowing relative […]

The tone of investor sentiment is signaling approach of a market bottom.

| September 21, 2011

The following chart from Ed Yardeni shows that extremely bearish sentiment occurs at market bottoms – such as now.  Notice that the ratio of bulls to bears broke below 1 at the market bottoms in 2002, 2008/2009, 2010 and today.  At some point the fever breaks and investors come back into the market.    Jeb Terry, […]

The signal from inventories and bank commercial & industrial loans and commercial paper issuance is that the economy is still expanding. This is NOT consistent with recessionary conditions

| September 21, 2011

The following chart from Ed Yardeni suggests the economy is still expanding.  Jeb Terry, Sr. Sept 21, 2011 Aberdeen Investment Management – a guide service for micro-cap technology investment

There doesn’t seem to be a slowdown in US exports if one looks at volume of outbound containers leaving the Port of L.A – one of our largest freight port.

| September 21, 2011

There are increasing fears of another recession.  It is understandable in light of the slowdown evidenced in economic metrics from July and August.  One encouraging stat is the number of containers being shipped out of Los Angeles.  These tend to be manufactured goods.  The trend is up.  August shipments were challenging the record high set […]

People spending more time on their mobile devices – more than they spend with newspapers and magazines

| September 21, 2011

A recent presentation by Geoff Ramsey of eMarketer updated the time spent each day by US adults on the different types of media. Time spent on mobile devices and spent on the internet is going up.  Time spent on other types of media is going down.  I have noted this trend in the past.  It […]