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Pre-Covid, next twelve-month operating margins for fortune 500 firms on an equal weighted basis (thus largely excluding tech mega-caps), were 13%. When Covid hit they quickly collapsed to 9% by 6/20. However, over the ensuing 12 months they more than…

When fund managers were asked what they consider the biggest tail risk, a recession is now top for 39% of managers, up from 18% a few months ago. Geopolitical conflict is unchanged at 25%, while inflation follows at 12%, down…

The labor market is meaningfully weakening. A year ago, the Y-o-Y increase in the labor force was 3 million and net employment gains were 2.9 million. 97% of job entrants found a job. Now the labor force is 1.3 million…

The Friday File: The current dollar value of a Paris Olympic gold medal is slightly over $1,000. The medal is composed of 505 grams of silver and six grams of gold. Silver medals are composed of 505 grams of silver…

Markets are implying an 80% chance of a 50bps September cut. Great news, right? Maybe not. On 1/3/2001, the Fed began with a 50bps rate cut and a recession came in March. On 9/18/07, the Fed also began with a…

Since 1930, a period of almost 100 years, the S&P 500 has historically declined by 5% about 3.3 times a year. The frequency of a 10% decline, or a correction, is 1.1 times a year, while the historic frequency of…

Since 1955, the Fed has unwound 86%, on average, of the prior rate hikes during the ensuing rate easing cycle, which we’re entering. This means the Fed funds rate bottoms out at 0.75%. The smallest historical reversal would suggest that…

Employers added 114,000 net July jobs, the lowest level since 12/20 except for the 108,000 three months ago. May and June were revised down by 29,000 and wage growth slowed to 3.6%, barely ahead of inflation, the weakest reading since…

The Friday File: The lightest Olympic athletes are Marathon and 10,000m runners. Female contestants average about 110 lbs., male competitors average about 135 lbs. The next lightest athletes compete in the 5,000m, followed by the 20km walk, and then the…

Yesterday, Nvidia’s market capitalization jumped $329 billion, the largest one-day rise. The increase alone would make the firm the 23rd largest in the S&P 500. The second largest one-day rise is $276.6 billion on 2/22/24 by Nvidia. The third largest…