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Matt's Market Insights

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A Fond Farewell to DTL

By Matthew Kerkhoff

 

By now most of you are probably aware that this is the last week that Dow Theory Letters will be published. If you haven’t had a chance to read the message that was sent out this morning, you can read it here, on the announcements section of the website.

 

Since this is the last time that you’ll hear from me via DTL, I thought I would take a moment to say some goodbyes, reminisce a bit, and let you know what I’ll be up to in case you’d like to continue following my work.

 

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Strong 4th Quarter Ahead?

By Matthew Kerkhoff

 

I was reading through some J.P. Morgan research over the weekend, and came across a number of key charts that I thought I would share with you today. But first, let’s take another look at the stark contrast between U.S. and international stock performance that has developed this year.

 

While the U.S. economy and markets continue to chug along just fine, the rest of the world is having trouble keeping up. And like a bull market riding on narrow leadership, when only a handful of countries’ stock markets are moving higher, it can be a sign of problems ahead.

 

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Breaking Down the U.S. Economy

By Matthew Kerkhoff

 

In last week’s article I elaborated on why it’s important to allow the economic backdrop to guide us when price action becomes erratic. Today, I thought we would take a short tour of the economy to see how some of the more important elements are trending.

 

As you’re well aware, GDP for the second quarter came in at 4.2%. That represents an uptick from the growth rates we saw over the last couple of years, and is the fastest annualized rate of growth since 2014.

 

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Lessons From a Textbook Correction

By Matthew Kerkhoff

 

If you’ve ever caravanned with others on a drive, or hike, then you know that sometimes different parties move at different speeds. The inevitable result is that the lead party has to slow down, or stop and wait for the others to catch up.

 

If you happen to be climbing Mount Everest, or trekking across the Pacific Coast Trail, then these “pauses” to regroup can be a lifesaver. They allow everyone to check-in and verify that all is well, before the climb continues.

 

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Which Yield Curve Spread is the Most Accurate?

By Matthew Kerkhoff

 

What’s the best thing to talk about when the market is firing on all cylinders? Recessions, of course. Rather than getting caught up in the excitement of Nasdaq 8,000 – which we reached today, or the fact that the S&P has finally broken out to new highs, let’s ignore the crowd and stay focused. We have work to do.

 

Today, we’re going to drill down into the yield curve once again because while this incredibly accurate recession predictor has been around for decades, it’s popularity and overall presence in the mind of investors seems to have increased recently.

 

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Approaching Major Resistance

By Matthew Kerkhoff

 

For the last few months, we’ve been commenting on the “stealth” nature of this bull market. While most investor attention has been focused on the major averages, which have been laying low, many of the junior indexes have taken out their high-water marks. That left us with the impression that the majors would soon follow.

 

The list of indexes that have climbed to new highs following the February swoon is quite exhaustive.

 

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