The Treasury market shrugged off greater than expected manufacturing data and import/export prices and focused instead on weaker than expected retail sales. Sales slumped in January by the most in nearly two years, perhaps indicating an abrupt pullback by consumers after a spending spree in the closing months of 2024. The immediate interpretation of the … Read more
There was no new ground broken during the first day of FRB Chairman’s Congressional testimony. Powell essentially reiterated what he had said at the conclusion of the January FOMC meeting, that the Committee is in “no rush” to lower the overnight rate. He described the labor market as “broadly in balance” and “not a source … Read more
The Administration is creating uncertainty, but this uncertainty is largely ignored by the markets. Is the President bluffing? Can the President remotely accomplish any of his objectives? Will it produce social unrest? Perhaps more direct, can change occur without a crisis? Most, including FRB Chair Powell has stated the current fiscal tract of government is … Read more
While the headline change in payrolls was disappointing relative to expectations, the numbers under the surface of the January report were considerably stronger. Beyond the upward revision of 100k to the prior two months of data, the dop in the unemployment rate to 4.0% was notable. The fact that it came despite an uptick in … Read more
The averages were mixed again yesterday even though over 300 S & P 500 members advanced. The averages might be flat, but the typical company is rising, the inverse of the last several years. The BLS employment report is released at 8:30. January’s report also contains revision from the previous months. The last revision that … Read more
Equites advanced ignoring underwhelming earnings from several tech heavyweights. Over 350 members of the S & P 500 rose even as the Magnificent Seven sank 1.8% on the back of GOOG’s disappointing results. The market has been whipsawed by data that has surprised in both directions, trade tensions and questions about whether the billions of … Read more
The JOLTS Jobs data surprised again, however this time on the downside. There are currently 7.6 million job openings. Analysts had forecasted eight million openings. November’s data however was revised higher and the “Quit Rate” (workers who are quitting to find another job) rose to 2.0% up from 1.9%. The data suggests the labor market … Read more
It is almost universally accepted that tariffs are inflationary and may perhaps cause a recession. It was almost universally accepted that the most aggressive Fed in history that increased the overnight logarithmically from 0.00% to 5.5% would be recessionary. In fact, all 24 Primary Dealers (money center banks that interact directly with the Federal Reserve/Treasury) … Read more
Where to? The Federal Reserve’s preferred measure of inflation—the core PCE—rose 0.2% from November and 2.8% from a year earlier. The data largely met expectations but is still considerably higher than the 2.0% speed limit. Real disposable income barely rose for a second month, perhaps causing the savings rate to fall to 3.8%, the lowest … Read more
The economy ended on a strong note. Fourth quarter GDP increased at an annualized rate of 2.3% after rising 3.1% in the prior three-month period. The median forecast called for a 2.6% growth rate. On the surface it appears this was a miss, but the details suggest otherwise. Inventories subtracted a full percentage point from … Read more
