The narrative is rising about the potential implications of massive federal spending and the gargantuan deficit. DOGE is becoming a household world and politicians, think tanks and the electorate love to condemn government waste, fraud and abuse. The issue at hand is the details,,.the specifics as to what agency or program is to be cut. … Read more
Welcome to Thanksgiving Week. Trading is expected to wane during the week as the markets are closed Thursday and are only open to 1:00 PM on Friday. Liquidity may be “challenged” given the potential dearth of traders. The economic calendar has several top tier indicators, the response to which may be exacerbated, perhaps specifically in … Read more
Equites were bifurcated as the Dow advanced about 1.0% while the NASDAQ was essentially unchanged. Energy, finance and the industrials led the advance. Treasuries sold off across the spectrum amid fears of escalation of warfare in Ukraine and the murky outlook for both Federal Reserve interest rate cuts and leadership at the US Treasury Department. … Read more
Markets are continuing to ignore an escalation in Ukrainian tensions. Bloomberg reports that Ukrainian forces fired British cruise missiles at military targets inside Russia for the first time. UK approved the use of its missiles in response to Russia deploying North Korean troops in its war against Ukraine. Additionally, the Washington Post reports anti personal … Read more
Market complacency is great. Ukraine took advantage of its newly granted long rang missile capabilities to strike a military base on Russian territory. Moscow, which warned against such action, stepped up its threat of a nuclear response to conventional attacks. As widely noted, the introduction of North Korean troops to the war has been greeted … Read more
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
