TIPS

What Does The Rest of the Market Think About The ‘Epic’ CPI (TIPS, breakevens, even consumers themselves)

By |2021-11-10T19:57:58-05:00November 10th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

We already covered the yield curve’s reaction given today’s whopping consumer price levels. How about strictly inflation expectations in the market? TIPS, breakevens and such.Unsurprisingly, shorter-term breakevens (5s) jumped 12 bps to a new high of 308 bps (boosted considerably following the auction on October 21st). Pulling up the rest of the inflation “curve”, the 10-year breakeven added a “mere” [...]

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Weekly Market Pulse: Divergence

By |2021-11-08T08:16:35-05:00November 8th, 2021|Alhambra Research, Bonds, Commodities, Currencies, Economy, Markets, Real Estate, Stocks|

Almost all the economic data released last week was better than expected. ISM manufacturing PMI, Redbook retail sales, ISM non-manufacturing PMI (an all-time high), factory orders (headline and ex-transportation), ADP employment, jobless claims (new post-COVID low), non-farm payrolls, the unemployment rate, manufacturing employment, all better than expected. There were some disappointing reports: construction spending was down 0.5%, the trade deficit [...]

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Weekly Market Pulse: Growth Scare?

By |2021-11-01T08:01:59-04:00October 31st, 2021|Alhambra Portfolios, Alhambra Research, Bonds, Commodities, Currencies, Economy, Markets, Real Estate, Stocks|

A couple of weeks ago the 10-year Treasury note yield rose 16 basis points in the course of 5 trading days. That move was driven by near-term inflation fears as I discussed last week. Long-term inflation expectations were and are well behaved. I wrote nearly 2000 words last week about that change in inflation expectations and I'm so glad you [...]

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Short Run TIPS, LT Flat, Basically Awful Real(ity)

By |2021-10-27T20:33:22-04:00October 27th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Over the past week and a half, Treasury has rolled out the CMB’s (cash management bills; like Treasury bills, special issues not otherwise part of the regular debt rotation) one after another: $60 billion 40-day on the 19th; $60 billion 27-day on the 20th; and $40 billion 48-day just yesterday. Treasury also snuck $60 billion of 39-day CMB’s into the [...]

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Weekly Market Pulse: Inflation Scare!

By |2021-10-25T07:02:26-04:00October 24th, 2021|Alhambra Research, Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Real Estate, Stocks, Taxes/Fiscal Policy|

The S&P 500 and Dow Jones Industrial stock averages made new all-time highs last week as bonds sold off, the 10-year Treasury note yield briefly breaking above 1.7% before a pretty good-sized rally Friday brought the yield back to 1.65%. And thus we're right back where we were at the end of March when the 10-year yield hit its high [...]

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Producer vs. Consumer Price Potential

By |2021-10-14T19:49:54-04:00October 14th, 2021|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

More inflation numbers around the world, more of the same. Producer prices, this time. Beginning in the US, the annual rates remain high and reached a little higher in September 2021. Commodities have been the highest of all, up 20.47% year-over-year for another greatest increase since the mid-seventies. The PPI for final demand goods was up 11.68%, that the most [...]

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Weekly Market Pulse: Inflation Scare?

By |2021-10-11T07:46:51-04:00October 10th, 2021|Alhambra Research, Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Real Estate, Stocks, Taxes/Fiscal Policy|

Bonds sold off again last week with the yield on the 10-year Treasury closing over 1.6% for the first time since early June. The yield is now down just 16 basis points from the high of 1.76% set on March 30. But this rise in rates is at least a little different than the fall that preceded it. When nominal [...]

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Weekly Market Pulse: Zooming Out

By |2021-10-04T07:35:32-04:00October 3rd, 2021|Alhambra Research, Bonds, Commodities, Currencies, Economy, Markets, Real Estate, Stocks|

How often do you check your brokerage account? There is a famous economics paper from 1997, written by some of the giants in behavioral finance (Thaler, Kahnemann, Tversky & Schwartz), that tested what is known as myopic loss aversion. What they found was that investors who check their performance less frequently are more willing to take risk and experience higher [...]

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Talking To Bill About Evergrande

By |2021-09-20T19:43:00-04:00September 20th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The US Treasury auctioned off $45 billion in 3-month (13w) bills this morning. Despite the Federal Reserve paying 5 bps for SOMA UST collateralized, for “some” reason the primary market’s players wanted this issue far more. The auction’s high was just 3.5 bps, its median 2.5. These are down from 4 bps and 3.5 bps, respectively, last Monday. With the [...]

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CPI Comes ‘Home’ To The Other Side of Inverted TIPS

By |2021-09-14T16:52:43-04:00September 14th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

January 2021 was, it may have seemed, only the start of something big. Huge. Colossal. Coronavirus vaccines had been discovered, publicized, and rolled out, meaning for the first time a real shot at ending the pandemic. The world could quickly get back to normal, the economy recovering its footing, and between January and that bright future Uncle Sam was going [...]

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