Market Insights

Keep up with InvesTech’s review of weekly economic news and data releases and how these may affect your investing. Visit weekly for new Market Insights.

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Traffic of prospective buyers collapses – a major warning flag for the housing market

NAHB Traffic of Prospective Buyers fell by the second-largest amount on record in May, indicating that the housing market is now skating on thin ice…

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Margin Debt solidifies our ‘red flag’ warning

Margin debt continued to decline in April and is confirming that a longer-term stock market peak is likely in place...

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Inflation cools slightly, but its persistence will keep the Fed on a tightening path

Inflation ticked lower in April, but its persistence surprised many and is likely to keep the Fed tightening monetary policy in the months ahead.

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Crypto miners break critical support. Could Bitcoin be next?

[Updated May 9] Earlier this year, we began tracking 10 of the leading crypto mining stocks to warn of a potential loss of exuberance surrounding the crypto-mania…

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Resilient ISM Surveys show signs of initial weakness

While the ISM surveys remain at historically strong levels, the combination of high prices and falling demand could weigh on companies in the months to come…

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The battle between consumer confidence and inflation “heats” up

Consumer Sentiment rebounded in April after suffering its second worst 11-month skid in history… however, one important component has reached its most worrisome level in over 40 years.

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Gorilla Index tests another critical support level

Following the pandemic-induced crash of 2020, we developed our new Gorilla Index as we recognized that just 10 mega-cap momentum stocks accounted for a disproportionately large 27% weight in the S&P 500 Index...

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The Leading Economic Index advances but it’s not all good news…

The Conference Board’s Leading Economic Index (LEI) gained 0.3% in March, indicating that economic growth is likely to continue in the months ahead…

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Soaring mortgage rates hit the brakes on home buyer traffic

Traffic of Prospective Buyers from the National Association of Home Builders (NAHB) fell for the fourth straight month after this month’s six point decline.

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Margin debt craters in March!

Margin debt has joined the ranks of emerging warning flags after falling significantly in March.

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Inflation surges higher, taking small business optimism to new lows

The Consumer Price Index (CPI) surged to 8.5% on a year-over-year basis in March, the highest reading since 1981.

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Service sector shows resilience despite record inflation challenges

The ISM Services Index increased by 1.8 points to a reading of 58.3 in March, its first gain in four months.

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Manufacturing slows as prices remain hot

The ISM Manufacturing Index fell to an 18-month low in March, due largely to new orders falling by the fastest clip since the COVID-19 induced recession in early 2020.

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Inflation sets (another) record

Personal Consumption Expenditures (PCE) climbed to +6.4% in February, its 15th straight monthly gain which ties the prior record set in 1980.

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Consumer Sentiment craters as inflation expectations hit a 41-year high

The Consumer Sentiment survey from the University of Michigan plunged further below its pandemic lows in March as inflation expectations surged to the highest level since 1981.

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LEI nudges higher in February but risks to growth remain

The Leading Economic Index (LEI) from the Conference Board edged higher by 0.2% in February, yet the gain was not enough to offset half of the prior month’s -0.5% loss.

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Inflation surges to a new high ahead of next week’s Fed meeting

The overall Consumer Price Index (CPI) jumped +0.4% to +7.9% in February, the highest reading since January 1982.

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Small Business Optimism sinks as price hikes hit a record high

The Small Business Optimism Index from the National Federation of Independent Business unexpectedly fell to the lowest level in over a year as surging inflation and labor shortages continue to be headwinds.

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Service sector unexpectedly slows to a 12-month low

The ISM Services Index dropped to a reading of 56.5 in February versus economists’ expectations for an increase to 60.9.

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Manufacturing improves after a three-month skid

The ISM Manufacturing Index jumped by one point and remains at an historically strong reading of 58.6 after having contracted for the previous three months.

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Inflation surges to a 40-year high

Personal Consumption Expenditures (PCE) rose to +6.1% in January, the highest reading in 40 years.

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Our leading housing index breaks below initial support

Our Housing [Bubble] Bellwether Barometer has broken under its initial support level as mortgage rates have spiked to 3.9%.

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Leading economic indicators slow unexpectedly to start the year

The Leading Economic Index (LEI) from the Conference Board fell by -0.3% in January, notably lower than economists’ expectations for a +0.3% increase.

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Margin debt plunges in January

Margin debt has joined the list of bear market warning flags as it cratered to start the year.

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Inflation takes a big hit on Sentiment!

Consumer Sentiment from the University of Michigan unexpectedly cratered to an 11-year low in February as inflation continues to weigh heavily on the consumer.

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Small Business Optimism falls further as inflation soars

Small Business Optimism from the National Federation of Independent Business fell to an 11-month low in January as inflation continues to be challenging

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Service Sector loses some steam, but increases pressure for rate hikes ahead

The ISM Services Index declined to start 2022, as persistent labor and supply chain shortages weighed on the measure.

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Manufacturing softens for the third straight month

The ISM Manufacturing Index continued to moderate in January, as its third consecutive decline brought it down to a 16-month low.

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Consumer Sentiment hits new lows on inflation concerns

Consumer Sentiment from the University of Michigan fell further below its pandemic lows this month as inflation concerns continue to mount.

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The InvesTech Gorilla Index loses technical support

During the final years of the 1990s Tech Bubble, we observed an interesting dynamic where a relatively small number of mega-cap stocks became responsible for the majority of the stock market’s advance.

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New highs in the Leading Economic Index come with a warning from the Conference Board…

The Conference Board’s Leading Economic Index (LEI) improved by 0.8% in the final reading of 2021, with only one of its ten components contributing negatively…

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Homebuilder confidence dips – has it peaked for this cycle?

NAHB Builder Confidence declined by one point to a reading of 83, yet the measure is still at a very strong historical level.

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Inflation continues to hit consumer attitudes

The University of Michigan’s measure of Consumer Sentiment declined slightly in January’s preliminary reading to reach the second lowest level of the past decade.

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Consumer prices rise at fastest pace since 1982

Inflation as measured by the Consumer Price Index (CPI) climbed to +7.0% in December, the highest reading in nearly 40 years and a far cry from last December’s print of +1.4%.

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Small business optimism inches higher but inflation continues to weigh

NFIB Small Business Optimism gained just 0.5 points in December to remain at a relatively depressed reading of 98.9.

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Canary Index plunges below critical support

Our InvesTech Canary (in the coal mine) Index has been testing its critical support level for the last few weeks. On Wednesday, the Index -7% loss definitively broke support.

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Service sector is hampered by Omicron

The services sector finished 2021 on a significantly weaker note, as the ISM Services Index fell to a reading of 62.0 versus expectations of 67.0.

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Manufacturing disruptions start to moderate

The ISM Manufacturing Index moved lower by 2.4 points in December, yet the Index remains at a historically strong reading of 58.7, as many of the supply/demand imbalances in the manufacturing sector began to normalize last month.

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Pressure Factor reaches overbought extreme

Our InvesTech Pressure Factor, a technical tool that indicates how overbought or oversold the market is in the short term, reached an extreme overbought reading of + 69 earlier this week.

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Consumers find a little bit of holiday cheer

Consumer Sentiment from the University of Michigan improved by 3.2 points in the final reading of 2021, primarily because the outlook of low-income households jumped as they begin to realize the benefits of the ongoing labor shortage in the form of wage growth.

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More strong inflationary data coming down the chimney

Personal Consumption Expenditures (PCE) rose to 5.7% in November, the highest reading in nearly 40 years.

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Leading economic indicators continue to advance

The Conference Board’s Leading Economic Index (LEI) continued to move higher in November on broad strength.

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Canary Index testing critical support level

Our InvesTech Canary (in the coal mine) Index recently plunged below initial support and proceeded to close below its critical support level for the first time yesterday.

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Producers continue to get squeezed

The Producer Price Index (PPI) for Finished Goods continued to surge in November and has now increased by +13.6% from a year ago.

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Inflation soars to a 40-year high

The Consumer Price Index surged to 6.8% in December, the highest level in nearly 40 years.

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InvesTech Negative Leadership Composite Triggers Distribution

For the first time since the 2020 COVID-19 Crash, our Negative Leadership Composite (NLC) has started showing bearish Distribution.

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Manufacturers show strength despite persistent challenges

The ISM Manufacturing Index ticked higher to a reading of 61.1 in November, keeping it at a historically strong reading.

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Surging prices weigh on the minds of consumers heading into the holiday season

Core Personal Consumption Expenditures (PCE), which excludes volatile food and energy prices, climbed even further beyond the Federal Reserve’s 2.0% inflation target in October.

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Borrowing on Margin Soars as Speculation Re-engages

Margin debt surged to new highs in October in a clear indication that speculation remains alive and well in the stock market.

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Leading economic indicators keep on rolling – what does it mean for the equity market?

The Conference Board’s Leading Economic Index (LEI) reached a record high for the seventh straight month in this morning’s release, suggesting that economic strength will continue into 2022.

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Homebuilder optimism regains its footing

After sliding for much of this year, NAHB Builder Confidence continues to rebound and remains above its pre-pandemic highs.

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Consumer Sentiment falls to the lowest level in a decade

November’s preliminary reading of Consumer Sentiment fell further below its pandemic lows due to intensifying inflation fears.

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Inflation accelerates and broadens at an alarming pace

The Core Consumer Price Index (CPI) -which excludes food and energy prices- soared to another 30-year high in October as pricing pressures continue to mount.

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Inflation insights from the corporate trenches…

As the inflation debate rages on, we explore what CEOs and corporate executives of Fortune 500 companies are seeing on the ground floor.

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A record high for the services sector, but not as strong as it appears…

The ISM Service Sector surged to the highest level in its 24-year history last month due to the combination of strong consumer demand and supply chain disruptions.

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A tug of war between manufacturing demand and supply chain challenges

The ISM Manufacturing Index ticked down by 0.3 points in October to remain near one of the highest readings of the past 50 years.

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Inflation puts the Fed further behind the eight-ball

Core Personal Consumption Expenditures (PCE), the preferred inflation measure of the Federal Reserve, climbed to 3.64% last month to remain at the highest level in over 30 years.

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Consumer Sentiment gets hit hard by inflation psychology

The University of Michigan’s measure of Consumer Sentiment declined in October as inflationary fears pushed consumers’ attitudes back below pandemic levels of a year ago.

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New home sales jump in spite of record price increases

New home sales of 800,000 in September was notably higher than economists’ expectations and was the largest month-over-month increase since July of 2020.

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Consumer Confidence stabilizes yet inflation expectations become even more extreme

Consumer Confidence rose modestly in October after having fallen for the four months prior, bolstered primarily by declining COVID-19 cases.

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Leading economic indicators rise, but at a much slower pace…

The Conference Board’s Leading Economic Index (LEI) increased to another record high in September, yet last month’s growth of 0.2% missed economists’ expectations and was the second slowest reading since last year’s COVID-induced recession.

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Producers feel the pinch

The Producer Price Index (PPI) for Finished Goods climbed from 10.2% to 11.7% in September, the highest reading since November of 1980.

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Inflation just won’t quit

The Core Consumer Price Index (CPI), which excludes food and energy prices, moved slightly higher to 4.0% on an annual basis in September to remain near a 30-year high.

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The service sector remains robust

The ISM Services Index exceeded economists’ expectations by ticking higher to a reading of 61.9 in September.

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The Fed has an inflation conundrum

Core Personal Consumption Expenditures (PCE) –the Federal Reserve’s preferred inflation measure– edged up slightly to 3.62% from 3.60% for the month prior.

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Confidence continues to tumble in September

Consumer Confidence from the Conference Board continued to worsen in September as fears over inflation and the COVID-19 Delta variant persist.

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Speculative Borrowing Re-engages

The latest margin debt reading showed that speculation regained momentum last month as it surged to yet another record high.

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The Leading Economic Index continues to advance

The Conference Board’s Leading Economic Index (LEI) exceeded economists’ expectations by jumping +0.9% in August.

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Homebuilder confidence stabilizes… for now

NAHB Builder Confidence registered a warning flag last month after it fell sharply to a 13-month low, yet it managed to rebound by one point in September.

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Inflation stays high as sticky prices are poised to pick up the slack

The Consumer Price Index ticked down to 5.3% from 5.4% last month and remained at one of the highest readings of the past twenty years.

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Inflation continues to weigh on small business optimism

The NFIB Small Business Optimism Index increased by a meager 0.4 points in August (top graph) as small business owners continue to contend with both rising input costs and labor challenges.

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Is speculation starting to fade?

The speculative frenzy that was ignited by the trillions of dollars in monetary and fiscal stimulus since the pandemic began may be starting to dissipate, according to our InvesTech Investor Psychology Barometer (IIPB). 

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Producer prices surge to record levels

The Producer Price Index (PPI) surged to an all-time high of 8.3% in its most recent reading, showing that supply/demand imbalances are persisting.

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Manufacturing remains strong, but challenges remain…

The ISM Manufacturing Index moved higher to a reading of 59.9% in August to remain near one of the highest levels of the past two decades.

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Consumer confidence craters in August

Consumers became significantly more pessimistic in August due to a combination of persistent inflation pressures and fears over the Delta variant.

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The Fed’s preferred inflation measure still running hot

Core Personal Consumption Expenditures (PCE), which excludes volatile food and energy prices, rose for the fifth straight month to 3.62% versus the prior month’s unrevised reading of 3.5%.

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Leading economic indicators show strength

The Leading Economic Index (LEI) from the Conference Board improved once again in July, taking the Index to another record high.

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Leading housing indicator raises a warning flag

NAHB Builder Confidence (top graph below) sank to a 13-month low in August after suffering its fourth largest drop of the past decade.

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Small businesses voice concern about the future

NFIB Small Business Optimism Index unexpectedly declined by -2.8 points to a reading of 99.7 as economic expectations retreated in July.

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Manufacturing remains strong but moderates

The ISM Manufacturing Index declined by -1.1% to 59.5% in July, yet it remains at one of the highest levels of the past 30 years.

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The Fed’s preferred inflation measure continues to rise

Core Personal Consumption Expenditures (PCE) –the preferred inflation measure of the Federal Reserve– climbed further beyond the central bank’s 2% inflation target to 3.5% last month.

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Consumer Confidence Steady Despite Inflation Concerns

Consumer attitudes were virtually unchanged in July...

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LEI continues to climb

The Leading Economic Index (LEI) from the Conference Board gained 0.7% last month on positive contributions from eight of its ten leading components.

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Margin debt stays the course

Margin debt climbed in June for the eighth straight month as investors continue to borrow on margin to buy stocks.

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Homebuilders remain optimistic

Homebuilders became slightly less optimistic this month according to the National Association of Home Builders, yet their confidence remains higher than at any point prior to the COVID-19 pandemic.

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COVID-19 recession declared shortest on record

The National Bureau of Economic Research (NBER) has officially announced that the pandemic-induced recession has ended.

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Small business optimism improves

Small businesses became more optimistic last month as the economic recovery continued to gain momentum.

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Inflation surges in June

The core Consumer Price Index (CPI), which excludes volatile food and energy prices, continued to surge in June.

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Services remains on solid ground

The ISM Services Index fell to a reading of 60.1% in June, still firmly in expansion territory and just 3.9% below its record high from the month before.

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Manufacturing remains red hot

The manufacturing sector stayed soundly in expansion territory in June, as the ISM Manufacturing Index registered a strong reading of 60.6.

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Consumer confidence rebounds, but…

Consumer Confidence from the Conference Board increased for the fifth consecutive month as pandemic woes continued to fade.

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Leading inflation indicator points higher

Inflation has emerged with a vengeance in recent months, and the FIBER Leading Inflation Index (LII) suggests that that pricing pressures are continuing to mount.

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Consumer optimism emerges, yet inflation lurks

Consumer optimism has been held down by the pandemic over the past year, but attitudes have started to improve as COVID-19 disruptions begin to fade.

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