Rate Hike Odds Into Next Year and A Recap Of End Of Cycle Data
Marc Chandler, Global Head Of Currency Strategy at Brown Brothers Harriman and the editor of the great blog MarcToMarket.com shares his thoughts on the recent data we have seen out of the US. The jobs data from last week was strong on the wage inflation front which is driving further rate hiking expectations. We look at what the market is predicting and how it all impacts investment strategy moving forward.
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Revenue from individual and payroll taxes was up some $105 billion, or 4 percent, as increasing wages, mostly due to more people having jobs, offset a lower withholding rate. while corporate taxes fell $71 billion, or 30% largely due to Trump tax reform, which lowered corporate tax rates
he budget deficit is blowing out in a big way, and in the first 11 months of the fiscal year, the deficit was $895 billion, $222 billion or 39% more than the previous year.
CBO now says the deficit will approach $1 trillion by the end of this fiscal year or one year sooner than disclosed in the CBO’s most recent forecast ; in April the agency didn’t expect the deficit to reach $1 trillion until 2020.
Turkeys Fly
Of course, the same thing could be said of the trillion-dollar companies, Amazon and Apple, whose market capitalizations are largely the result of cheap credit.
The 60 biggest exploration and production firms are not generating enough cash from their operations to cover their operating and capital expenses. In aggregate, from mid-2012 to mid-2017, they had negative free cash flow of $9 billion per quarter.
Apocalypse Now!
Every debt expansion ends in a debt contraction. Stocks crash. Jobs are lost. The economy goes into reverse, correcting the mistakes of the previous boom.
Your talking about PM companies?
60 biggest have negative cash flow?
sorry,….Oil companies….
BOB MORIARTY SPECIAL: No Holds Barred Interview on WORLD AFFAIRS!
https://www.zerohedge.com/news/2018-09-11/budget-deficit-soars-895-billion-will-hit-1-trillion-one-year-ahead-plan