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Employment in the US & Stock Valuations October 23, 2013

By Knowledge Leaders Team in Uncategorized

For the last 40 years, the employment to population ratio has been well correlated with equity valuations.As would make sense, when more people are working, income is higher, demand is more sustainable and investors rationally capitalize corporate earnings at a higher rates.  When employment rates are low, the opposite happens.

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NYSE Margin Debt rose to All-Time highs October 23, 2013

By Knowledge Leaders Team in Uncategorized

Peaks in NYSE Margin Debt has been a leading indicator in the last large market declines (2000, 2007, 2011). NYSE Margin Debt was looking like it might be topping out in April. However, the latest data for September shows it increased by about $20 billion to new all-time highs.

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Credit Impulse From QE Fading October 22, 2013

By Knowledge Leaders Team in Uncategorized

A good proxy for the expansion and/or contraction of the shadow banking market is the change in the amount of commercial paper outstanding.  Successive rounds of QE–represented by the expansion of the Federal Reserve’s balance sheet–have had a stimulative, but short lasting impact on the expansion of shadow banking credit.

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