Bill Hester, CFA, CMT

Asking Data What It Thinks

[John P. Hussman, Ph.D. @hussmanjp]

New from Bill Hester (and a must read)
Going All In - The Bubble in Profit Expectations
https://t.co/pTcTVyXRzh

[Jesse Felder @jessefelder]

'The reliance of high valuation multiples on expanding profit margins is probably one of the most underappreciated risks in the market right now.' https://t.co/KUeEq73Oxi by @billhester

[John P. Hussman, Ph.D. @hussmanjp]

Seven Reminders While on Recession Watch

New article from @billhester👏✅
https://t.co/gQ7KTwkg44

[Bill Hester, CFA, CMT @billhester]

@NorthmanTrader or opening gaps as a cumulative sum...

[Bill Hester, CFA, CMT @billhester]

@alxcrypto Typically just use matplotlib.

[Bill Hester, CFA, CMT @billhester]

Retail sales will not be the data series in charge of ringing the bell at the next market top.

[Bill Hester, CFA, CMT @billhester]

@mjmauboussin quotes about 20 research papers every podcast. But, amazingly, no matter how many shows I listen to with him as a guest, it's almost always a different set of 20 papers. This conversation is a good review of his work...

[Tobias Carlisle @Greenbackd]

"The bottom line I always say to my students, you’re a business person, so forget about formulas. ... Whatever the cost of capital you come up with should make business sense. And of course you want to have it tied to principles and finance"

@mjmauboussin on the cost of capital

[Bill Hester, CFA, CMT @billhester]

It's the first time that year-over-year Industrial Production is negative for the U.S., Germany, U.K., and Japan since 2008.

[Bill Hester, CFA, CMT @billhester]

a frugal and effective recession composite...

[John P. Hussman, Ph.D. @hussmanjp]

ICYMI: New white paper, Strategic Allocation. Excited about the new methods presented here. Jointly evaluates stock valuations and bond yields, adds market internals for risk-management (critical in recent years). Just in time, given the bubble in passive.
https://t.co/fNf2QWtKgt

[Bill Hester, CFA, CMT @billhester]

After the last few weeks it's hard not to think of 2000. Overvalued market, yield curve inverts in Feb, market tops in March, multiple attempts at overhead resistance, two breaks of that resistance, and slow data but not yet 'recessionary'.

[Bill Hester, CFA, CMT @billhester]

in chart title: Indicators.. ugh..

[Bill Hester, CFA, CMT @billhester]

It's a good day to remember that jobs data lags. By how much? By about 10 months.

[Bill Hester, CFA, CMT @billhester]

Marty Zweig had a temporary employment series that reached back to the 1970's. If his series dropped 2% YOY it signaled recession. It worked in 2001 and 2008. It's one of the first numbers I look at on jobs day. For his recession model, see: https://t.co/NJzdnDfX5e

[Rich Miller @RichMiller28]

Is the solid jobs market showing signs of cracking? Two canaries suggest it might be https://t.co/SM4OQP4WDi

[Bill Hester, CFA, CMT @billhester]

Will be interesting to see if manufacturing jobs come in positive tomorrow as expected. Here are the changes in the August regional Fed surveys on employment. Philly:-26, Dallas:-10, Richmond:-3, KC:-1. Empire up, but it was down 22 over the prior 3 months.

[Bill Hester, CFA, CMT @billhester]

Growth rates in jobs where you make stuff.

[Bill Hester, CFA, CMT @billhester]

None of this data suggests that the economy is in recession, or that we will not be able to avoid one. But it does suggest that if the economy goes into recession, bond traders will have been late in inverting the curve.

[Bill Hester, CFA, CMT @billhester]

A problem with the advice that there is no need to panic until 18 months after a yield curve inversion is that the US economy has much less momentum this time around.

[Bill Hester, CFA, CMT @billhester]

The ISM PMI is typically 55.9. It's currently 51.2.