NIFE News and Press, Direxion Fallen Knives From 09/19/22

Summary S&P 500 operating margins are at an all-time high. We expect reversion because of wage pressures, cost inflation, cost of debt rising and top line growth waning. Is the stock market a popping bubble? Perhaps it’s just deflating? By Douglas R. Ter...

Summary At the end of the week, the stock market responded to something other than Federal Reserve and the fight against inflation. FedEx Corp. announced that its revenues were coming in at a slower pace than expected and that it was laying off people, closing offices, and cutting...

Summary The Fed has no room for errors at this week's FOMC meeting. The communications must be crystal to avoid a repeat of the July disaster. The Fed needs the market to cave in to its demands. For further details see: The Fed Needs T...

Summary The median economist forecast is for more inflation and higher unemployment than the Fed's median projection in June. The Bank of Japan meeting ends early on September 22, and the Bank of England meeting a few hours later. Japan will report August inflation figures a few d...

Summary What has this market so spooked? Simple Answer: Negative headlines shoveled to investors without perspective. Case in point: the August CPI report. A few deep breaths and a little market history from our last major brush with high inflation and interest rates (the 1970...

Summary Gasoline and clothing retailers saw declines which correlates to falling prices while vehicle sales show a surprise positive indicating some easing of supply issues. Together with the rise in vehicle sales, the underlying post-COVID economic demand remains in an uptrend de...

Summary Hotter-than-expected August CPI and quarterly options/derivatives expiration made for a toxic mix. “Core” CPI was reported up 0.6% for the month (7% annualized!), double estimates. Two-year Treasury yields surged 17 bps on CPI Tuesday – and rose 31 bps...

Summary PMI survey data produced around the world by S&P Global have an unrivalled reputation for providing advance insights into changing economic conditions. However, the surveys can also provide valuable, unique guidance on corporate earnings trends, as illustrated by the f...

Summary Much of the recent strength in profit margins has been driven by price realizations. Resilient consumer demand has benefitted from a labor market that continues to run hot, and sufficient levels of personal income. We expect that the upcoming earnings season will featu...

Summary Despite all-time record revenues for August, spending jumped from $439B last August to $523B this August, a YoY increase of almost 20%. Interest Expense is the 6th largest budget expense, nearly $250B below the next expense of Medicare. The recent drop in Individual In...