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TODAY’S $100 BILLION TREASURY BILL AUCTION

The US government plans to borrow $100 billion in a single Treasury debt sale this week, an amount that was unfathomable 20 years ago and exceeds previously issued guidance.  This unprecedented figure showcases both the magnitude of the government’s borrowing needs and the importance of its ability to attract investors. The Treasury said it will … Read more

A MODERATE RALLY

Optimism over monetary policy and profits was the catalyst for a moderate advance.  The market is suggesting almost an 86% chance of an interest rate reduction in September and almost 50 bps of easing is now anticipated by year’s end.  There is little on this week’s economic calendar that could alter this view. Regarding earnings, … Read more

JULY’S LABOR REPORT DISAPOINTED…THE BOTS ARE IN CONTROL

July’s unemployment data was weaker than expected. Moreover, there were considerable downward revisions from prior months.  With the revisions, employment growth over the last three months has averaged 35,000—the worst since the pandemic.  Approximately 40% of the revision was in state and local government education payrolls. The unemployment rate rose 4.2% vs 4.1% the month … Read more

MSFT IS THE SECOND $4 TRILLION COMPANY; JULY’S  UNEMPLOYMENT DATA IS RELEASED AT 8:30

MSFT and NVDA are both $4 trillion companies representing about 15% of the S & P 500’s capitalization.  The combined companies are worth about 7.5% of global GDP, amounts that are incomprehensible and tough to rationalize.  Is a Minsky Moment now at hand, defined as the point where a crisis occurs after a long period … Read more

WAS YESTERDAY A CONFLICTING DAY?

Yesterday’s data was stronger than expected.  Second quarter GDP expanded by 3.0% versus a 0.5% decline registered during the first quarter.  The data has been heavily skewed by trade and tariffs.  Net exports added 5 percentage points to GDP after subtracting the most on record in the first three months of the year according to … Read more

A NUMBER OF TOP TIER EVENTS

Will this be an eventful week? There are several profit reports from the Magnificent Seven.  There is a data dump including initial estimates of second quarter GDP, PCE data, a labor report and a FOMC meeting.  Ot will the hype leading into these top tier events be nothing more than noise? Commenting about earnings, Bloomberg … Read more

YET ANOTHER SURPRISE IN THE DATA

Weekly jobless claims fell for the sixth consecutive week, the longest stretch of declines since 2022.  The number of claims was also lower than any estimate.  Treasuries sold off on the news as it again alters the odds of any immediate change in monetary policy with the market now discounting less than two reductions in … Read more

YET ANOTHER CONTRADICTION

Bloomberg writes Fed Funds Futures traders are increasing the odds that the Fed will cut interest rates more aggressively next year as speculation mounts that an eventual change of leadership may deliver easier monetary policy that the President is demanding.  Based upon several market gauges traders are now price 76 bps of cuts next year … Read more