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 [...]
Why was the stock market down almost 6% last week? I know what you're thinking - has this guy been under a rock somewhere? But I'm serious. I know what all the pundits, commentators and talking heads are saying about the immediate cause. It's about the China devaluation and the knock on effect in other emerging markets. It's about global [...]
Top News Headlines China devalues the Yuan. China lets Yuan float. China supports Yuan. Something happens in the Chinese currency market. Oil prices continue to fall. US raises flag over Havana. Dissidents' invitation gets lost in the mail. Tesla to sell more stock, profits elusive. Okay, very elusive. Okay, not frigging likely anytime soon. Dow chart gets a death cross; [...]
US monetary policy is the major driver of the global cost of capital. As a Fed rate cycle approaches, we see the effects of raising required returns across the globe. The increased volatility is a reflection of investors' changing return requirements, risk assessments and the associated unwinding of leveraged exposure. As we approach the anticipated Fed rate hike, look for he [...]
The “dollar” has ended the month much the way it started. Despite headlines suggesting the dollar is “down” today, it is very much proving to be disruptive across every proxy. Gold was down to $1,080 at the AM fix before rebounding. Commodities were sold broadly, with copper back near $2.359, down almost $0.02 at some parts of the futures curve; [...]
All that we see or seem is but a dream within a dream. Edgar Allan Poe All things are subject to interpretation. Whichever interpretation prevails at a given time is a function of power not truth. Friedrich Nietzsche I was walking down the street wearing glasses when the prescription ran out. Steven Wright I think one of the [...]
US stocks continued their recently more volatile ways this week giving up almost all the gains of last week. In fact, the S&P 500 is now basically flat for the last four months, making no headway since late November despite a series of nominal new highs along the way. As the Fed has backed away from buying assets - assets [...]
The Dow Jones Industrial Average was down a bit over 100 points last week but that hardly does justice to a week with multiple triple digit swings. Three of the last six trading days have seen a move of at least 1%, a level of volatility that must be unnerving to anyone who thought the last few years were representative of [...]
The US Dollar index is up 8.6% since the beginning of July and it seems everyone is jumping on the King Dollar bandwagon. With Mario Draghi openly rooting for a weaker Euro and Abenomics pushing down the Yen the dollar has emerged, as it often does, as the safe haven for global investors. The rise could have some major implications, [...]
For all the drama and activity of bearishness in August, curve steepening has been the primary influence in September. There haven’t been as many notable events that would easily and cleanly explain the sudden shift, other than peculiarities in the cash markets (including supply flow). In other words, I don’t think it much of a breakout of sudden optimism but [...]
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