Carnegie Market Blog

 

The Sharing Economy, the Fed, and 2016

Posted by Brent Luce on Dec 17, 2015 8:46:32 AM

The Sharing Economy

I am fascinated by the new “Sharing Economy”.   The sharing economy is the new trend of people sharing their skills and resources with total strangers.  Technology has brought people together like never before and in ways never imagined.  The most recent sharing economy entity that has caught my attention is skillshare.com.  On skillshare.com, people sign up to learn random skills about a variety of subjects.  The key here is that the “teachers” are other users—total strangers—sitting at home behind their computers showing people the skills that they are passionate about.  Once they get more than 25 viewers, these “teachers” start to get paid.  Some examples the exploding Sharing Economy are (these all have links you can click):

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Topics: Stocks, Fed

Are Stocks Headed for a Bear Market?

Posted by Brent Luce on Dec 11, 2015 5:00:00 PM

Market Weakness

Since August, with the exception of a six-week period that ended earlier this week, the S&P has been trading below its negatively sloped 200-day moving average for the first time since 2011.  The 200-day moving average is a widely used method to define whether an index is in a downtrend or uptrend.  With this in mind, it would be easy to argue that the market has begun a downtrend.  Over the last 25 years, the market has performed poorly when below a negatively sloped 200-day moving average and vice versa. Since 1990, the S&P has increased almost 1000%.  Within that span, Investing only during periods when the S&P was below a downward sloping 200-day moving average would have resulted in a 75% LOSS of capital.  Currently, the market has just barely ticked into this territory, so it is quite possible that a “whipsaw” like 2011 occurs, but it is worth acknowledging this development.  MORE:  Are Stocks Headed For A Bear Market? 

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Topics: Fed, Economy

The Fed and the Pumpkin Roll

Posted by Brent Luce on Oct 28, 2015 5:00:00 PM

M&A

M&A activity remains very strong and, in fact, there were several deals announced today.  The chart below shows North American deal volume since 2003. As you can see, M&A activity is higher now than in 2007.  In the past, heavy deal volume often coincided with peaks in the stock market.  Is this time different?  Will this heavy M&A activity continue?

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Topics: M&A, Fed

Is the Fed Behind the Curve?

Posted by Brent Luce on Oct 13, 2015 5:00:00 PM

Jobless Claims

Last week’s initial jobless claims were the lowest in 42 years as shown in blue in the chart below.  The reading garnered headlines on its own, but if you think about the fact that the population has grown a lot since then and look at this based on population (the white dotted line), it is clearly the lowest ever (or at least since they started calculating it in 1967).  For those of you who look very closely at these charts, you will notice the population adjusted series doesn’t make it all the way to the right side of the chart…this is because the census data only goes to the end of 2014.  On a related note, last night on Facebook I saw two different people who had posted something saying their companies needed workers.  Could we be approaching a labor shortage and wage inflation?

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Topics: Fed

Tesla, Oil, and a Rate Hike?

Posted by Brent Luce on Sep 14, 2015 4:00:00 PM

Rig Count

I have shown oil price charts a number of times in previous blogs, but I have not highlighted rig counts for a while.  In the chart below, the white line is oil prices and the yellow line is the number of active oil and gas rigs operating worldwide.  Historically, and not surprisingly, major declines in oil prices have been followed by major declines in rig counts.  This time is no exception.  The current rig count decline has been as big and as steep as any decline since the 1980s.  

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Topics: Oil, Fed

Tesla, Market Weakness and the Fed

Posted by Brent Luce on Aug 20, 2015 4:03:00 PM

Recent Market Action

The stock market weakness I have highlighted in previous blogs continues.  Today, stocks were down fairly strongly.  Fears have shifted from Greece to concerns about global and emerging market economic weakness.  Last week’s currency adjustments in China attracted a lot of attention, not only as a sign of slowing growth in China, but because it raised concerns regarding a currency war.  Of course, all of this feeds into expectations of when the Fed will raise interest rates. Not surprisingly, as the chart below highlights, the odds of a September rate hike have lessened: 

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Topics: Market, Fed

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