Bloomberg estimates four companies (AMZN, META, GOOG, MSFT) will spend $505 billion on AI capital expenditures for 2026, up from an estimated $366 billion in 2025. Wall Street is growing increasingly concerned about the ability to generate profits from all this AI cap ex, expenses that are started to viewed as a large potential risk. … Read more
No change in monetary policy is expected at the conclusion of today’s FOMC meeting. The vote is expected to be uneventful, lacking the drama of past meetings. The markets are suggesting the next interest rate reduction may be in June, followed by another at the end of the year. This outlook is in direct contrast … Read more
The dollar has declined to a four-month low and gold/silver are surging to record levels over fiscal and geopolitical fears. Earnings season accelerates this week as over 90 S & P 500 companies post results. META and MSFT announce on Wednesday and AAPL on Thursday. The handful of profits that have been released have topped … Read more
It is widely accepted that the FOMC will not change monetary policy on Wednesday. The Committee’s comments about lingering inflationary pressures, stabilization in the labor markets and current growth fueled by AI will be parsed. The Committee will not issue a new “dot plot” or the individual members expectations for inflation, growth and employment. At … Read more
Markets were relatively quiet yesterday following the President’s statement that he would not use force to acquire Greenland, calling for immediate negotiations. Equites gained further momentum later in the day as the President said there is a “framework” for a deal. The Treasury market also was considerably quieter following the realization that there may not … Read more
Some pointed to the headlines that a Danish pension fund is planning to exit US Treasuries for the selloff in the UST and the equity markets. The odds of wholesale selling are extremely low as it is the proverbial nuclear option…MAD III. [MAD is the cold war acronym of Mutual Assured Destruction…MAD I was not … Read more
Markets are climbing a wall of worry. Valuations are historically high. The geopolitical environment is changing every day. Is the Administration bullying the Fed? The President is demanding a 10% cap on credit cards. Societal pressures are at levels not experienced since the early 1970s. The national debt and the interest coverage on it is … Read more
Led by the mega caps, equites slid again on several reasons. Wholesale inflation (PPI) rose slightly in November from a month earlier, driven by higher energy costs. Some believe this is structurally problematic as producer prices are running well above consumer inflation and the gap is widening. Typically, when this happens, margin compression occurs or … Read more
The core CPI rose less than expected, rising by 0.2% from November versus the 0.3% expected increase. On an annual basis it advanced 2.6%, matching a four-year low. There was some bounce back in shelter costs, which were the largest factor in the overall monthly advance according to the BLS. OER is still the greatest … Read more
Is the Administration on the verge of losing major Wall Street support? Bloomberg writes It is hard to see the Justice Department’s criminal investigation of Fed Chair Jerome Powell, purportedly for statements surrounding the renovation of the central bank’s headquarters, as anything other than the latest iteration of Trump’s campaign to subjugate the Fed—it is … Read more
