Long-dated Treasury bonds continued to sell off, sending yields to the highest level in almost six months. The cause of the selloff was continued economic strength that is defying conventional wisdom. The narrative is also rising that Trump’s proposals will increase the deficit via higher tariffs, lower tax collection and reduced regulations. The two-month slump … Read more
Equites led by the richly valued NASDAQ declined moderately Friday on fears that monetary policy may not be as dovish as previously believed [and discounted]. I have lost count as to how many times this scenario has unfolded over the last two years. At the time of this writing the market is now suggesting only … Read more
Recently released data has been consistent with a theme of stronger than expected growth, sticky inflation and yields possibly staying higher for longer than many had anticipated. Moreover, many want clarity on which policies President-Elect Trump will actually through, policies on tariffs, taxes and immigration. Commenting on yesterday’s data, weekly unemployment claims fell to the … Read more
Inflation remained firm in October, underscoring the ongoing risks Federal Reserve officials face in trying to bring price pressures fully under control. The core CPI—which excludes food and energy—increased 0.3% for a third month. Over the last three months it rose at a 3.6% annualized rate, marking the fastest pace since April according to the … Read more
Today October’s CPI is released. At the time of this writing, the markets are suggesting a 60% probability of another rate reduction in December. The markets have also lowered the odds on the scope of future reductions. Treasuries across the curve have been crushed since September as economic activity has been stronger than anticipated. The … Read more
President Trump will soon own the same economic problems they talked about in the campaign, the first amongst them is the debt. US debt is now growing at twice the pace of GDP, which in itself is a robust pace. Every president from WWII to 2008 had talked about resolving the debt issue. Non accomplished … Read more
Is Donald Trump the ultimate comeback kid? Love him or hate him one has to be in awe of his determination and perseverance to overcome. Life is indeed stranger than fiction. Not even the greatest Hollywood writer could envision the events of the last nine years. Perhaps of even greater significance is the make-up of … Read more
Who will win today? As we watch the returns all must remember the country has survived 235 years. This is not going to be the last election and if the American people don’t like the policies they get, more changes will be made in the years ahead. This is particularly true regarding the federal budget; … Read more
This could be potentially a significant week. The election is tomorrow, and the polls indicate an extremely tight race. The betting markets suggest a different scenario with the possibility of a Red Sweep. Democracy is an ugly type of government, but it is the best form yet followed. Differences are generally resolved by words instead … Read more
The Magnificent Severn tumbled over 3% as disappointing outlooks from giants MSFT and META fueled concerns that the AI frenzy that has powered this cohort has gone too far. As noted several times, the mega sized techs have been priced to perfection and anything short of such—either in the current or in future—would be met … Read more
