Automobile production figures through Q1 were released this morning. I pay close attention to these numbers as contractions in automobile production has tended to lead recessions (see below).
Gray bars indicate recessions. Blue line is monthly production figures. Orange line is annual.
Per CNBC: “Motor vehicles and parts production dropped 2.5 percent last month after increasing 2.3 percent in February. An inventory overhang in the automobile sector is weighing on production, contributing to factory employment declining in March for the first time since July 2017.” Continue reading “Auto Production Figures, Inventories and 0% Financing on New Trucks”
When most people are sleeping, I’m either working out or researching. Today, how about I just share my weekend research with you?
“In the short-run, the market is a voting machine… but in the long-run, the market is a weighing machine.” – Warren Buffett paraphrasing his mentor Benjamin Graham
My interpretation of this brilliant, succinct statement of the types we’ve come to expect from Warren Buffett, is that in the short-term, markets trade based on investor emotions (or things like high-frequency trading), but, over the long-term, fundamentals ultimately determine price. In other words, over the long-term, price will accurately reflect the fundamental value of a company even if there is a bunch of noise in the interim. Continue reading “Updated: The Price You Pay Determines Your Return”
Yesterday afternoon, FedEx reported disappointing global revenue and earnings. This is important because package delivery tends to be closely correlated with the strength (or weakness) of the economy.
But not only did they report weaker-than-expected results, FedEx also issued an overt warning about the global economy. Specifically, FedEx’s chief financial officer stated, “Slowing international macroeconomic conditions and weaker global trade growth trends continue, as seen in the year-over-year decline in our FedEx Express international revenue.” [emphasis mine] Continue reading “FedEx’s Warning, Slowing Growth and Valuations”
Danielle DiMartino Booth, a former Federal Reserve insider, recently wrote a great article for Bloomberg. In it she provides a couple informative stats involving the relationship between unemployment rate changes and recessions.
First, she points out, “According to historic payroll data and the National Bureau of Economic Research, every time the three-month average unemployment rate exceeded its six-month average at cycle peaks over the past 50 years — like it did in January — the U.S. economy has experienced a recession.” Continue reading “Every Time This Has Happened Over the Last 50 Years A Recession Followed”
This morning I wanted to share a few historically-reliable recession indicators that are flashing either yellow or red (as well as one still giving the green light) to help provide more context of where the U.S. may be residing in the economic cycle.
Continue reading “A Few Important Recession Indicators Flashing Yellow and Red”