Business

While the US manufacturing sector has been in a clear recession for the past year as a result of the collapsing commodity complex, so far the stable growth in low-paying service jobs - at least according to the BLS' statistical assumptions - such as those of waiters and bartenders have kept the broader service economy out of contraction (even though recent Service PMI data has been downright scary). 

This is now changing: as we showed a month ago, according to the lagged effect of the collapse of the Restaurant Performance Index, that party is over:

USDJPY just had its best week in 2 months, funding bullish momentum and carry trades around the world in the midst of dismal economic data everywhere and tumbling earnings expectations. This "bullish" Yen strength, however, amid China's biggest weekly devaluation in almost 3 months, was ironically driven by drastic investment outflows - record sales of Japanese stocks by foreigners (sell JPY), and record purchases of foreign bonds by Japanese investors (sell JPY).

Submitted by Lance Roberts via RealInvestmentAdvice.com,

At the beginning of this month, I discussed the monthly statistics for March. To wit:

“It is often the case that the month following a negative return month will post a positive return as markets bounce from oversold conditions. However, as shown below, this is not always the case.

 

“It’s almost like the timing belt on the global growth engine is a bit off or the cylinders are not firing as they should.”

Back in January 2015, when we looked at the utterly disconnected fundamentals of the energy sector, we were stunned to note that the forward 12-month P/E for the Energy sector has risen above 22.4, the first time it had done so since April 8, 2002. On that date, the closing price of the Energy sector was 225.15 and the forward 12-month EPS estimate was $10.05.

Our amazement was contained in the following summary: "using the S&P Energy Sector Index data, the sector's forward multiple is now an absolutely ridiculous, mindblowing 23x."