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 [...]
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 [...]
St. Louis Fed President James Bullard has become something of a spectacle in the past year or so. As the FOMC claims to be data dependent upon its on schedule for ending ZIRP, Bullard’s interjecting media appearances seem to straddle either side, the exact which he takes being dependent on maybe not data but at least markets. While stocks seem [...]
That's the question everyone is asking these days. Will the Fed go ahead and raise interest rates at their next meeting? Or is the economy still so soft they don't dare derail what recovery we've managed to attain? Was last week's employment report good enough to keep the Fed on track to do what they seem to think they need [...]
Economic Reports Scorecard – 8/17/15 to 8/28/15 The economic data since my last update hasn't changed much. I know that is getting boring to hear but it does have the advantage of being the truth. Manufacturing continues to struggle, housing is doing relatively better, inflation is dead and the consumer is struggling - although apparently confidently so. The jobs market [...]
Lost in all the stock market focus is the renewed disaster being signaled across credit markets, “inflation” expectations in particular. Here oil prices and the “dollar’s” darkening intersect with credit and broad financial settings. Quietly, market-based measures of the anticipated future “inflation” path have crashed. Inflation breakevens in TIPS hedging were as low yesterday as the lowest point from January [...]
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 [...]
Economic Reports Scorecard - 8/3/15 to 8/14/15 The economic reports since my last update two weeks ago are exactly equally split between better than expected and worse than expected. The narrative hasn't changed much, consistently inconsistent and wholly unsatisfying. Autos are doing well, funded by what appears to be increasingly shaky sub-prime financing, manufacturing in general though is doing poorly, [...]
The broad survey in funding terms suggests that funding markets have been more disturbed in the past few weeks than broader credit markets. That isn’t to say that credit is unaffected, only the degree is in argument. The treasury curve has renewed its flattening tempo and nominal rates are somewhat leaning in the lower direction. The difference may simply be [...]
An old Wall Street saying opines that one shouldn't "fight the Fed" and it is said to be good advice. The popular belief about this saying is that it means one should embrace risk when the Fed is easing because ultimately the goal of the easing (more growth) will be accomplished. When the Fed is tightening one should shun risk, assuming that [...]
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