Next week is packed with significant economic data as we get the Consumer Price Index (CPI) and the Producer Price Index (PPI) before the next Fed policy statement on Wednesday. However, the precursor was the November payroll (jobs) report on Friday which was a healthy +199k jobs created with an unemployment rate of 3.7% and […]
Category: Updates
2024 On the Horizon
*I appeared on the Schwab Network this week to discuss some earnings reports and you can see the appearance if you click HERE. Only one more Fed meeting for 2023 later this month and it looks like it will be third meeting in a row with no rate hike. That will certainly signal that this […]
Outlook Negative
Media Appearance: I was on the Schwab Network this week to discuss the earnings of Walt Disney and Warner Brothers Discovery and you can see the hit HERE. It was a relatively uneventful week until we got a speech from Fed Chair Powell on Thursday where he reminded the market that this rate cycle is […]
Reflex Rally
Quite the market reaction this week as both stock and bond prices rose from oversold levels as three months of decline may have come to a conclusion. The Fed decided to hold off on rate increases this week and did warn of persistent inflation becoming a problem but the market interpreted this as the end […]
More Bonds for Sale
The next stop on the Fed’s train to lower inflation is this Wednesday where interest rates will stay unchanged. Unfortunately, the inflation data has been sticky including the Personal Consumption Expenditures (PCE) that was released on Friday. One more important announcement to watch on Wednesday is the US Treasury quarterly refunding schedule. Their last announcement […]
The Yield Curve Strikes Again
There was no relief from rising yields this week as the strength in the labor market and consumer spending continue to look strong and that means inflationary pressures remain (for now). The adjacent chart illustrates the sharp move higher in the long end of the curve over the last 90 days. This means the curve […]
Bonds Rule The World
An intense week with a second war raging in Israel which adds to the uncertainty swirling around the financial markets. Will this war be quick? Will it draw in more countries? Will it be drawn out as in the Ukraine? The government of Israel declared war so this is not a conflict or a skirmish […]
In Search Of…
After four weeks of falling the S&P 500 finally closed higher (slightly) after a better than expected jobs report for August acted as a catalyst for a rebound in Friday’s session. A strong labor market is good for the economy but wages are poised to go higher and that means the Fed has more work […]
Return of the Bond Vigilantes
In 1993, the 10Yr Treasury yield surged from a 20-year low of 5.2% to above 8% within a year in what was later coined the Great Bond Massacre. Why? Because the Federal Government was running deficits. Congress and President Clinton got the message and in response balanced the budget and ran a surplus by the […]
Connecting The Dots
The Fed held their policy meeting on Wednesday and kept rates unchanged which was expected. However, their forward guidance changed significantly when reviewing their dot-plot which is a survey of each voting member’s projection of interest rates. What changed in the dot-plot was a cut in the Fed Funds Rate in 2024 from -100bps to […]