When decrying the state of monetary policy that relies on essentially a “dead” money market, what does that actually mean? The FOMC, after all, is using the federal funds rate to “tighten”, ostensibly, even though there isn’t anybody there. They have developed other tools to go along with the federal funds rate, but all that does is highlight the central [...]
Immediately after the Fed hiked interest rates last Wednesday – after sitting at 0% for 7 years – markets acted pretty much as one might expect. The Fed tightens monetary policy when the economy is strong so rising stock prices, rising interest rates and a strong dollar are all things that make sense in that context. I am sure there [...]
The wedge pattern that was formed by the S&P 500 Index ((IVV)) finally resolved itself with a big move downward in August. The market corrected to the 1867 and retested that low in late September, before fully recovering to near all-time highs. Now we are in the midst of another wedge pattern. Will we witness more of the same? The index [...]
Top News Headline Stocks end down after wild 700 point range trading. US ends oil export ban. Crickets chirp. Republicans debate, Democrats debate, the nation shudders. Star Wars: The Force Awakens shatters box office records. I visit the mall to Christmas shop, discover the obesity epidemic is not solved, mirrors in short supply. Economic News Fed hikes rates by 25 [...]
Economic Reports Scorecard – 11/6/15 to 11/20/15 The incoming economic reports ran two to one negative over the last two weeks, continuing the trend we’ve seen all year. That’s one of the worst two week stretches we’ve seen all year. Janet Yellen has been telling us for over a year that changes in policy were “data dependent” but that is [...]
Lower oil prices provides tailwind and extends the current, elongated economic cycle Buy competitiveness Watch how China is managing their slowdown (money supply contraction and currency devaluation) Foreign equities outperform during rate hike cycles Bonds are vulnerable Click here to sign up for our free weekly e-newsletter. For information on Alhambra Investment Partners’ money management services and global portfolio approach, Douglas [...]
The Fed’s industrial production series also includes estimates on total motor vehicle assemblies. Auto sales in general have been one of the only bright spots in the economy, especially since the 2012 slowdown (even though it has been boosted artificially via credit far, far more than income gains). Given that trend, it is still difficult to assess whether activity in [...]
I covered a good deal of the background here, so I should only reiterate that it is a profound difference in actual mechanics this time as opposed to last. At the end of June 2004, Alan Greenspan’s Fed commanded that money market rates follow a new federal funds target (from 1.00% to 1.25%) and money rates did so. Of course, [...]
The FOMC at least still knows how to throw a party. It may not be what it once was, but for one day there was the familiar euphoria predicated upon the wish that central bankers might know something about anything. All-too-quickly, however, it vanished as it becomes increasingly clear, despite all attempts to rewrite this history, that there are no [...]
For an economy that is supposed to be on the verge of overheating, or at least moving decisively in that direction, there are an inordinate number of indications of a cyclical stall and termination rather than some beginning (or ripening). I’m not referring exclusively to economic indications, either, such as the Federal Reserve’s own industrial production figure that just showed [...]
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