A Bullish Signal From The 2017 Bespoke Report

Yesterday we posted a bearish chart from our 2017 Bespoke Report market outlook.  Lest we end the year on an overly negative note, we thought we’d also post a more positive spin on things.  We like to think our outlook paints a full picture, taking into account both the positives and negatives facing investors.  In 178 pages of charts, analysis and commentary there is obviously no shortage of important data points, some of which paint a positive, while others a negative picture.  Below we’re including one of the more bullish tables from the outlook report.  In the table below we show market returns following long periods in a bull market where the S&P fails to make a new bull market high.  As can be seen, long consolidation phases without a new high, tend to be followed by positive returns over the following 3, 6 and 12 months. Since we exited a 416 day consolidation phase in July 2016, this certainly qualifies as a positive indicator heading into 2017.

To view the full 2017 Bespoke Report, simply sign up for a 30-day free trial to Bespoke Premium.  It’s that easy!

bull_market_droughts

Special Reads: 2016, The Year In . . .

OK, the year is coming to na end — but the round up of year end reading seems nearly impossibly long. Conquer the mayhem with these 10 reads: • The Year in Markets: 2016 in Nine Charts (Wall Street Journal) • 2016: The Year in Quotes (The Atlantic) • 2016: the year of anger, Trump’s ‘word salad’ and…

Read More

The post Special Reads: 2016, The Year In . . . appeared first on The Big Picture.

Procrastinating on December 31, 2016

Preview of Procrastinating on November 20 2016

Interesting Reads:


And Over Here:


You Might Look at:


Perhaps Worth Looking at...

bradford-delong.com: Grasping Reality with Both Hands 2016-12-31 17:49:33

Must-Read: Answer: we don't. We never have. The question of "how do we deal with the bad effects of policies to enrich the country and the world as a whole by increasing trade?" have always been met by: "we reject burial insurance; we don't want it". The question of "how do we deal with the bad effects of technological transformation?" have always been met by: "it's foreigners fault; we blame them"--taking, as Pascal Lamy says, the finger of globalization for the moon of market capitalism. The real question is: How to deal with market capitalism's transformation of land, labor, and finance into "commodities"--and thus of their communities, their income levels, and their industries into things that must pass a market profitability test--and people's Polanyian discovery that what they thought were rights to community prosperity, income levels, and occupations are not recognized because they are not secured by property rights? That question is never engaged with--because foreigners (or immigrants) are there to be blamed for eveything that goes wrong:

Pedro de Costa: After the US elections, how do we return to a constructive debate about trade?: "Governments need to get serious about the very real possibility that employment trends... driven by technology and robotics may happen more quickly than public policy can adapt...

...Economic policymakers need to be hard at work laying the groundwork for large-scale future job creation needed to absorb workers affected by changing industries.... Unions need to be more honest with their members about the benefits of trade and the true culprits of weak employment and low wages: underlying economic weakness.... NAFTA didn’t kill U.S. manufacturing, despite so much noise to the contrary. China’s entry into the World Trade Organization did take a toll on American manufacturing jobs, but they also allowed many US firms to remain competitive and countless US consumers to pay lower prices.... Let’s hope the shift toward a more constructive discussion can happen quickly after the election hubbub is over...

bradford-delong.com: Grasping Reality with Both Hands 2016-12-31 17:49:26

Kansas and the myth of trickle down tax cuts Jared Bernstein On the Economy

Must-Read: Yes. Steven Moore is incompetent. Why do you ask? For him to say that he was surprised at the fact that lots of people used the pass-through income loophole in the plan he sold Kansas Governor Brownback is for him to admit he has no business recommending policies to anybody:

Jared Bernstein: Kansas and the myth of trickle-down tax cuts: "This WSJ piece about the ongoing supply-side tax cut experiment in Kansas...

..a microcosm of the Trump tax plan, designed, in fact, by some of the same dubious characters.... Back in 2012, Gov. Brownback was persuaded by some of the same folks now advising Trump to sharply cut state income taxes and to fully exempt pass-through income (income from a business that you pass-through to your personal income tax).... As soon as I and every other tax wonk heard about the pass-through exemption, we concluded that the incentive to restructure as a pass-through entity would be irresistible.... Steve Moore, a key trickler that pushed the plan in Kansas, didn’t see that coming:

Sometimes it was legitimate, and sometimes it was a gaming of the tax system to pay the zero rate, so that loophole has to be closed. Unless you have some rules about this, people really will shift income and they’ll find ways to legally avoid paying tax, and that was never the intention.

Who’d a thunk it?

Moore is now a Trump adviser....

Suppose you tried to predict state job growth using just national job growth and a trend term. You’d get a decent fit, but to be clear, this is of course not a detailed, causal model, just a correlation exercise. So I ran such a model on Kansas, stopping the estimate in 2012. Then I forecast job growth after that based on actual, national data. National job growth handily tracks that of KA up until around when the tax cuts hit the scene.... But if facts could kill the trickle-down tax cut myth, it would be long dead. I harbor no illusions: there is no other economic policy I can think of that is both so actively pursued yet so clearly wrong...

bradford-delong.com: Grasping Reality with Both Hands 2016-12-31 17:32:44

Should-Read: Tim Duy: Is The Fed About To Experience A Repeat of 2016? No: "Fed officials [have] penciled in three 25bp rate hikes for 2017...

...We all remember how “four” became “one” in 2016.... Will the same happen this year? I don’t think so; it is hard to see the Fed on pause for another twelve months.... Still, the broader point remains true that while further declines in unemployment will pressure the Fed to hiking rates more aggressively, low inflation like seen in November will temper that response. In addition, policy going forward depends on the relative tightness of financial markets in general, and the dollar in particular. And the dollar has been on a tear.... Some demand will be offshored as the rising dollar prompts the trade deficit to widen. Consequently, the Fed needs to be wary of feedback effects....

Bottom Line: The economic situation on the ground is very different from December of last year. Whereas the decision to raise rates at that time looked ill-advised, this latest action appears more appropriate given the likely medium-term path of the US economy. Assuming the US economy is near full employment, that path likely contains enough upward pressure on activity to justify more than one more rate increase in 2017. Three I think is more likely than one...

1 2 3 135