Derek Moore explains how what sometimes seems obvious isn’t what happens as we can see with inflation numbers that continue to move lower despite consumer sentiment surveys expecting 6.6% inflation in the next year. Plus, NVDA had its earnings and the stock’ forward PE is lower due to the next 12-month analyst estimates being near all-time highs. Plus, sell in May would have been a mistake as markets recovered and are now back to within several percent of all-time highs.

PCE Inflation vs CPI Inflation

NVDA forward PE ratio and earnings EPS estimates

Calendar Spreads vs Diagonal spreads explained

Inflation continues to be lower

University of Michigan consumer sentiment survey says 1-year inflation 6.6%

Atlanta FED GDP Now

EconPi

Mentioned in this Episode

Derek Moore’s book Broken Pie Chart https://amzn.to/3S8ADNT

Jay Pestrichelli’s book Buy and Hedge https://amzn.to/3jQYgMt

Derek’s book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Contact Derek derek.moore@zegainvestments.com

Derek Moore talks about seeing stories of exploding 30-year yields but what if they are low compared to historical relationships between the fed funds rate? Then, looking at how correlated the 60/40 portfolio has been over the last 5 years begging the question, did it do anything for investors? Later, looking at NVidia implied volatility ahead of its big earnings release this week to see what the options market is pricing in for a potential one standard deviation move? All this and more this week.

S&P 500 Index net profit margins expected next 12 months

The US Dollar index breaks below its trendline

Nvidia earnings and the options market

Forecasting expected 1-standard deviation moves using implied volatility

Correlations between the S&P 500 Index and the 60/40 portfolio last 5 years

Historical average of the spread between the 30 Year Treasury and the Fed Funds Rate

Should the 30-year treasury yield be higher?

Japan bond yields normalize reaching highest levels going back to 2007

Mentioned in this Episode

Derek Moore’s book Broken Pie Chart https://amzn.to/3S8ADNT

Jay Pestrichelli’s book Buy and Hedge https://amzn.to/3jQYgMt

Derek’s book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Contact Derek derek.moore@zegainvestments.com

Derek Moore reflects on market reaction to the 2011 US debt downgrade and explains what S&P, Fitch, and Moody’s have for ratings. Plus, are markets poised for more positive returns based on several indicators? The bear case against the markets would be a reduction in profit margins. Later, Derek reviews some data of future 12-month returns when consumer confidence is low as a contrarian indicator. Finally, looking at several current indicators and random musing in markets for clues about the future. All that and more this week.

S&P 500 Index net profit margins for Q1 2025

Consumer confidence and consumer sentiment are low but is that a good thing?

Looking at how often intra year lows on average are -14% but often markets end higher

12-month inflation expectations are now 7.3% highest since 1981

Hard vs soft data

Velocity of M2 Money Stock

What has been working asset class wise in 2025 YTD

15 biggest rallies since 1950 and subsequent forward total returns

Atlanta Fed GDP Now

Investment banks starting to reduce recession probabilities

Attribution of earnings EPS growth

DeGraaf and Zweig Breadth Thrusts occurring within 1 month of each other

Explaining the difference between Moodys, Fitch, and S&P bond ratings

Moodys downgrades US Debt

Mentioned in this Episode

Derek Moore’s book Broken Pie Chart https://amzn.to/3S8ADNT

Jay Pestrichelli’s book Buy and Hedge https://amzn.to/3jQYgMt

Derek’s book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag

Contact Derek derek.moore@zegainvestments.com