The 10-year Treasury Note yield fell 13 basis points last week, a move that would not normally rate any mention whatsoever, but the path of that small decline does. From Monday to Thursday, the yield fell, from high to low, by 34 basis points, a move that added 1.3% to bond prices (Aggregate bond index) in four days. In a [...]
We got the latest report on economic growth last week and it surprised most everyone. Real GDP expanded by an annualized 3.3% in the fourth quarter, well above the consensus estimate of 2%. Nominal GDP expanded an annualized 4.8% quarter to quarter and 5.8% year-over-year. The annualized quarter-to-quarter change is exactly the average annual change since 1990. Real GDP grew [...]
The financial commentariat first started to worry about recession in April of 2022 when the spread between the 10-year Treasury rate and the 2-year Treasury rate turned negative - the yield curve inverted. It subsequently righted itself to positive territory until July of 2022 and has stayed inverted ever since. Since an inverted yield curve has preceded almost every recession [...]
It's an election year and you know what that means. Yes, every four years we gather as a nation, a democratic nation, to decide which of the two candidates for President available to us is the least offensive. It isn't very democratic with just two options but that is the system that the politicians built to benefit...themselves and it's all [...]
I'm back! I took most of the month of December off, as I do every year, to do some thinking. Per the title of this essay, the purpose of these year-end musings is to gain some perspective. In the day-to-day, week-to-week, movements of the markets it is easy to forget that we are investing with a timeline measured in years, [...]
PPI Goods = -1.5% PPI Services = 2.1% PPI FD = .9% PPI translation to the consumer: PPI FD Personal Consumption = 1.04% PPI FD Personal Consumption less Food and Energy = 2.2% PPI FD Personal Consumption less Food, Energy and Trade Services = 2.9% PPI FD Personal Consumption less Food, Energy and Distributive Services = 3.4% We continue to [...]
Alhambra CEO Joe Calhoun explains why Alhambra still isn't invested in the S&P 500.
We have a lot to be thankful for here in the US of A. It is sometimes hard to remember that while being constantly bombarded by negative news, about the economy and the country more generally. I don't like to comment about politics - I have to watch my blood pressure these days - so I'll stick to economics and [...]
Stocks, REITs, and bonds all rallied last week on the back of what was interpreted as good news on inflation. The CPI report was better than expected, the overall level flat from September to October. Core inflation, less food and energy, was also better than expected at up 0.2%. Producer prices, reported the day after CPI were even better, coming [...]
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 [...]
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