Last week's employment report raised the odds of a December rate hike considerably and the consensus at this point seems to be that it is a done deal. The employment report was pretty good with the unemployment rate down to 5%, 271,000 jobs added and a pay hike to boot. Year over year average hourly earnings are now up 2.4%, [...]
Economic Reports Scorecard – 10/24/15 to 11/6/15 The economic data of the last two weeks stands in fairly sharp contrast to the markets' movements. Markets, particularly bonds and gold, are going all in, betting that this time Yellen & Co. have it right, that growth is really about to accelerate this time. From the end of the last FOMC meeting [...]
Top News Headlines Obama sticks a fork in Keystone after company withdraws request. Valeant troubles continue; CEO sells stock after margin call. Bill Ackman having a very bad month. DOJ ratchets up scrutiny of drug pricing. Seeking information from MRK, LLY and, of course, VRX. Berkshire Hathaway's profit more than doubles; other earnings news last week was pretty poor. Economic [...]
The deletion of “dollar” capacity in money dealing globally is not just a theoretical impugning upon asset prices alone. Corporate debt issuance has been obviously provoked to an increasingly smaller state. The numbers are starting to become serious, which may account for at least part of the economic misfortune that the Fed desperately wants the world to ignore. Where swap [...]
While the stock market had one of its best months in years, it was, like the jobs report, uncorroborated by almost everything else. The junk bond bubble, in particular, stands in sharp and stark refutation of whatever stocks might be incorporating, especially if that might be based upon assumptions of Yellen’s re-found backbone. Do or do not, corporate junk remains [...]
There is no accounting for revisions because by the time anyone remembers it was too late. The same is true for monthly variations that can easily become swallowed by overarching trends unconcerned with such small time periods. All of that means we shall repeat, over and over, the same incessant dichotomy whereby everything looks bad and even recessionary but the [...]
The investing environment remains challenging. Equity valuations are high after a 6 year extraordinary bull market. Bonds have been in a bull market for 35 years and yields, though off their 2012 lows, remain at historic extremes. After a 7 year, 700% bull in oil from 2001 to 2008, it gave back 90% of gains in 6 month. Oil followed this up with a 5 year [...]
For one, eurodollar futures are “obliged” to take account of any threats from the FOMC even though, in the end, they might only be self-fulfilling. Because the Fed has very little actual ability to condition money markets, none of that is truly “real” but there remains the unknown and money dealing agents still seem reticent about any kind of (further) [...]
The TIC update for August estimates provided some clarity on several accounts. Given the nastiness of the “dollar” environment in that month it was certain that the Treasury Department would display negative “dollar” conditions, and that was the case. The numerous subcomponents and categories were quite useful in corroborating that picture, even if there was some work and re-orientation in [...]
Much like global “inflation”, if you set out to find global “demand” you will be hard pressed to find it. QE was supposed to be a huge boost to aggregate demand, through inflation expectations, yet the score in 2015 is hugely negative. Overseas problems are not unfortunately so remote, despite all mainstream protestations, as you can simply trace it all [...]
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