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
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
Today is the conclusion of the FOMC meeting and it is almost unanimous that the Committee will not lower rates or adjust its balance sheet. Moreover, most agree there will be little change in the statement with perhaps some downgrading of the growth and uncertainty components. During the post-meeting press conference there might be questions … Read more
Can an argument be made that there is too much evidence available, to the point that one can find convincing reasons to believe almost anything. Then confirmation bias takes over and what someone wants to happen is going to happen. As noted several times, no one is completely objective and those who claim they are, … Read more
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
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
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
Equites were bifurcated yesterday. The NASDAQ “slipped” about 0.5% while the Dow rose about 0.25%. Bloomberg writes about 400 members of the S & P 500 rose as the Magnificent Seven mega caps halted a nine-day surge before the release of TSLA’s and GOOG’s results. Tariffs are still front, and center and the Treasury Secretary … Read more
Earnings season moves into full swing this week. Some have stated that guidance will be more important than usual to support current and future gains. At casual glance, the above statement about guidance has been echoed in almost every other earnings season. However, can companies post forward looking statements given the uncertainty in so many … Read more
The yield curve steepened as shorter rates fell as Fed Governor Christopher Waller reiterated his case for a July rate cut, while the data showed an improvement in consumer expectations for inflation. Treasuries trade on current and future inflationary expectations and according to the University Michigan Confidence Survey, consumers expect inflation to increase at an … Read more
