Market Monday #4: Boom & Bust

We are starting to see stock buyback action comparable to the last time we were late in the business cycle.

Quote of the Day

Screen Shot 2018-05-13 at 5.23.18 PM

Word of the Day

Business cycleInvestopedia defines the business cycle as “the rise and fall in production output of goods and services in an economy.” Investing Answers explains it as follows:

An expanding economy is characterized by low unemployment, high productivity, and high consumer spending. When there is a decline in productivity, business revenues start to decline. Companies, consequently, reduce their workforces to cut costs. This results in rising unemployment and lower consumer confidence and spending, which are all hallmarks of a recession.

As the recession weakens, incremental increases in productivity and revenues lead to an economic recovery. The unemployment rate is gradually reduced as companies begin hiring again. A decreasing unemployment rate leads to an increase in consumer confidence and spending, and the economy begins expanding again.

One economic indicator that shows the business cycle at work is the unemployment rate, seen in today’s chart of the day.

Chart of the Day

Unemployment is at an historically low level of only 3.9%:

unrate_may_18

Read

The Fed Is About To Kill The Credit Boom
Gary Gordon, Seeking Alpha, 05.10.2018

Jim Rogers Worries About Exploding Debt With Rising Interest Rates
Value Walk, 05.13.2018

Why the Buyback Boom Is Bullish for Investors
Andrew Bary, Barron’s, 05.12.2018

Three Things You Should Know about the Buyback Furor
Donald Marron, 04.18.2018

Rethinking Environmental Agreements
Edward B. Barbier, TripleCrisis, 05.09.2018

2 Chart Patterns That Every Investor Should Recognize
Ralf Lai, Investing Haven, 05.14.2018

Watch

In Case You Missed It

What Will Cause The Next Stock Market Crash?
Douglass Gaking, Seeking Alpha, 04.26.2018

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