United States

With the S&P500, seemingly unable to break decisively above 2090, investors are wondering what are the main catalysts that can push the market higher, and are asking questions. To help with the confusion, Deutsche Bank has laid out the top five recurring questions asked by investors who are trying to figure out what will push stocks higher. Among these are whether European (and global) equities will rally as Brexit fears are being priced out; is there scope for earnings upgrades and will value stocks finally start outperforming.

We have it on highest authority: the recent killing of Taliban leader Mullah Akhtar Muhammad Mansour by a U.S. drone strike in Pakistan marks “an important milestone.” So the president of the United States has declared, with that claim duly echoed and implicitly endorsed by media commentary—the New York Times reporting, for example, that Mansour’s death leaves the Taliban leadership “shocked” and “shaken.”

But a question remains: A milestone toward what exactly?

By now it is a well-known fact that corporations have no real way of generating organic profit growth in this economy (the recent plunge in Q1 EPS was a stark reminder of just that), so they are relying on two things to boost share prices: multiple expansion (courtesy of central banks) and debt-funded buybacks (also courtesy of central banks who keep the cost of debt record low), the latter of which requires the firm to generate excess incremental cash.

Just one week after the US Department of Commerce quietly slashed historical US capex spending by billions of dollars following a major data revision...

... it was time for another major revision to a series that is nearer and dearer to most Americans' hearts, namely Disposable Personal Income.

As we noted earlier, today's Personal Income and Spending report revealed that personal spending in April surged by 1%, or the most since August 2009 driven in part by a major jump on energy goods and services.

For decades, the story of Saudi Arabia recycling petrodollars, i.e., funding the US deficit by buying US Treasuries with proceeds of its crude oil sales (mostly to the US), while the US sweetened the deal by providing the Saudis with military equipment and supplies, remained entirely in the conspiracy realm, with no confirmation or official statement from the US Treasury department.