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Bonds

Macro: Markets — Banks exit overnight trade and extend duration

By |2023-11-18T09:03:02-05:00November 16th, 2023|Bonds, Commodities, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

For the first time since March we are seeing a positive correlation between bond yields and reverse repos sold by the Fed. The change started during the last week of October and has continued throughout November. The correlation in March coincided with bank failures, mainly Silicon Valley Bank and Signature Bank. In between March and the end of October, the [...]

Weekly Market Pulse: Dark Matter

By |2023-11-13T09:29:55-05:00November 13th, 2023|Alhambra Portfolios, Alhambra Research, Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Real Estate, Stocks|

It's the residual of all the stuff we can't explain. It's not that our models are wrong, it's the dark matter that's out there. - Fed Governor Neel Kashkari, referring to the "term premium" in long term Treasury yields The curious task of economics is to demonstrate to men how little they really know about what they imagine they can [...]

Weekly Market Pulse: Monetary Policy Is Hard

By |2023-11-05T21:30:33-05:00November 5th, 2023|Alhambra Portfolios, Alhambra Research, Bonds, Commodities, Currencies, Economy, Markets, Real Estate, Stocks|

So, is that it? Have rates peaked? Is the long bear market finally over?  The market decided last week that interest rates have peaked for this cycle. And if rates have peaked then all the assets that have been pressured over the last two years can finally come up for air. Since October 18, 2021, over two years ago, investors [...]

Macro: Treasury refunding — We don’t need as much as we thought — yields drop

By |2023-11-04T13:14:34-04:00November 1st, 2023|Bonds, Economy|

In August the Treasury Borrowing Advisory Committee (TBAC) told the market they were raising the net new money issuance recommendation for Q32023 from the initial guess of $733B to over $1T. They also announced a recommendation of $852B of net new money for Q42023. That spooked the bond market and 10-year yields jumped from 4% at the beginning of August [...]

Macro: GDPNow — a market mover

By |2023-11-01T16:21:48-04:00November 1st, 2023|Bonds, Economy, Markets, Stocks|

The most likely candidate for what moved markets today is the GDPNow update. The forecast for growth in Q4 dropped from an initial forecast of 2.3% to 1.2%. Of note, this is also a much slower growth than we saw in Q3. The bond market certainly reacted as yields continued to drop. The stock market appears to be reacting to [...]

Weekly Market Pulse: Follow Buffett’s Rule

By |2023-10-30T06:59:00-04:00October 30th, 2023|Alhambra Portfolios, Alhambra Research, Bonds, Commodities, Currencies, Economy, Markets, Real Estate, Stocks|

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. - Warren Buffett, October 16, 2008, Buy American. I Am. , New York Times That was a month after the bankruptcy filing of Lehman Brothers, in the teeth of the Great Financial Crisis. At the beginning of the article he admits that [...]

Weekly Market Pulse: An Ego Driven Fed

By |2023-10-22T18:25:55-04:00October 22nd, 2023|Alhambra Portfolios, Alhambra Research, Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Real Estate, Stocks|

Well, I finally got it. I've been fighting COVID for the last week and while most of my symptoms have improved, I am not 100% yet. My goal from the beginning of COVID was to avoid it, if at all possible, until it became endemic and less lethal. It seemed logical to me, a layman, that it would follow this [...]

Weekly Market Pulse: Prophets of Doom

By |2023-10-16T08:05:11-04:00October 15th, 2023|Alhambra Portfolios, Alhambra Research, Bonds, Commodities, Currencies, Economy, Markets, Real Estate, Stocks|

I said a couple of years ago that I thought that once all the distortions were past, we'd be back to where we started prior to COVID, but with more debt. The decade from 2010 to 2020 was the slowest decade of nominal GDP growth since WWII and the prospect of another decade of that wasn't all that appealing but [...]

Weekly Market Pulse: Good News Is Good News

By |2023-10-09T07:12:39-04:00October 8th, 2023|Alhambra Portfolios, Alhambra Research, Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Real Estate, Stocks|

The employment report on Friday seemed like a good one. The unemployment rate was unchanged as the economy added 336,000 jobs in September. The gains were widespread with additions in manufacturing, construction, wholesale trade, retail trade, transportation, warehousing, leisure and hospitality, healthcare and education, and government. Average hourly earnings were up 0.2% for the month and 4.2% year-over-year. It was [...]

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