Auto sales posted a slight headline miss for February 2017 with an actual SAAR of 17.5mm vs. expectations of 17.7mm, despite a huge surge in incentive spending YoY. Individual company results were decidedly mixed with GM and Ford both posting small beats while Chrysler/Toyota/Honda missed.
Via Michael Lebowitz of RealInvestmentAdvice.com,
“Today’s equity market valuations have only been eclipsed by those of 1929, and 1999.”
For those wondering what unleashed today's ferocious post-Trump, post-hawkish Fed speech rally, the reason may have nothing to do with optimism in the economy or another inflow of retail funds, and everything to do with incorrect - and bearish - positioning ahead of Trump's speech last night.
In the latest warning from the White House that it is set to unleash trade policy that will be in sharp conflict with generally accepted trade norms, most likely a reference to some form of Border Adjustment Tax, the Trump administration has warned that the U.S. isn't and won't bound by decisions made at the World Trade Organization, in outlining a new trade agenda that "promises to root out unfair practices by foreign countries" and to escalate what are already simmering trade conflicts.
Via Kevin Muir of The Macro Tourist blog,
The easiest way to become a trade-a-saurus is to assume correlations will continue forever and mindlessly fade divergences with the assumption they will recouple. Yet these divergences often offer clues that something might have changed and deserve further investigation.
Over the past couple of decades, ten year US inflation breakeven levels have traded inversely with the US dollar. This should be no surprise and makes sense. Lower US dollar equals more inflation.