Markets were relatively quiet yesterday, searching for a catalyst. Since May 1, the S & P 500 has had a narrow rebound following a 4.2% drop in April, a decline primarily the result of yet another in change monetary policy expectations.Neel Kashkari of the Minneapolis Fed commented yesterday “The Committee has more work to do … Read more
It is widely accepted that the valuation gap between value and growth stocks is historic. Bloomberg writes “value investing is a vanishing trade for more than a decade as the strategy has misfired again and again.Legendary hedge fund manager David Einhorn states “the valuation be damned boom in passive investing has fundamentally broken the markets, … Read more
Stocks head towards their best three-day rally of 2024 on expectations the Fed will be able to cut interest rates this year. Several days ago, equities suffered their worst month since September 2022 according to CNBC.The volatility is primarily the result of the lack of liquidity and utter domination of algorithmic and technology-based trading amplified … Read more
April’s jobless data was weaker than expected. Non-farm payrolls advanced 175,000 last month, the smallest gain in six months. The unemployment rate ticked up to 3.9%, the labor participation rate held steady but the pivotal rate for workers aged 25-54 increased to 83.5%, matching the highest level in two decades. Increased participation will help restrain … Read more
April’s unemployment data is released at 8:30. Bloomberg reports that the options market says stocks will swing widely after its release as it is expected that it will offer more clarity on how much the Federal Reserve may cut interest rates this year.Bloomberg writes the options market is expecting the S & P 500 to … Read more
Equites were initially spooked by data indicating that factory activity contracted for the first time since 2022 Moreover and perhaps more frighting, a measure of costs for materials and other inputs rose for the second straight month with the gauge increasing the highest level since June 2022. The JOLTS Job Openings were lower than anticipated … Read more
The FOMC will make a statement at 2:00 P.M. How will it affect psychology? No change in interest rates is expected.Yesterday a broad gauge of labor costs that is closely watched by the Federal Reserve accelerated in the first quarter by more than forecast. The Employment Cost Index (ECI), which measures wages and benefits, increased … Read more
The narrative is rising to extend the trading day. A Bloomberg article questions the rationale for such a change. According to the newswire, the regular market runs for 390 minutes on a standard trading day, however it might by the last 10 minutes that may only matter. Bloomberg states a third of all S & … Read more
A Bloomberg headline Friday read “AI Craze Powers Best Week in 2024 for Stocks.” The earnings induced surge in both MSFT and GOOG coupled with an inflation report that largely met expectations was the catalyst for Friday’s advance.The monetary policy narrative has radically changed with the markets now “reasonably assuming one interest rate cut, maybe … Read more
The headlines of the initial estimates of first quarter GDP were ugly. GDP rose at a 1.6% annualized rate, below all projections. What was perhaps more disturbing were the pricing pressures. A closely watched measure of underlying inflation advanced by 3.7%, also exceeding all estimates. Is stagflation at hand? Both the equity and Treasury markets … Read more
