Was yesterday a day of significance? The CPI was nominally lower than expected. The core rate climbed by 0.2% from April and 3.4% year over year, the slowest pace in more than three years. Analysts had expected a 0.3% and 3.5% pace, respectively. The headline rate was also lower than expected by 0.1%, posting a … Read more
Will today be of significance? As noted yesterday options have priced in a move of 1.3% to 1.4% if the CPI data is considerable different than the expected view. However, will this potential move be unwound by the outcome of the FOMC meeting? What are the odds that both events will not be an issue?Most … Read more
Yesterday was a quiet day heading into the two-day FOMC meeting and key inflation data. The narrative is rising about the concentration of the market. A Bloomberg headline read “Great Bear Market in Diversification Haunts Wall Street Pros.” The Newswire quoted Morningstar data that out of roughly 370 asset allocation funds tracked by Morningstar, just … Read more
The Treasury market got hit hard following a blockbuster May jobs report that lowered expectations for Federal Reserve rate cuts. The 10-year Treasury yield climbed about 13 bps to around a 4.4% yield and swaps no longer price an interest rate cut before December. As recently as Thursday two money center banks were predicting an … Read more
May’s unemployment data is released at 8:30. The narrative is rising the economy is slowing at a pace that would permit the Federal Reserve to lower interest rates later this year. Perhaps the trajectory of interest rates is more important today than ever before given the gargantuan national debt of over $35 trillion and growing. … Read more
The ISM Service survey expanded in May by the most in nine months, exceeding all forecasts in a Blomberg survey of economists. The ISM business activity index—which parallels the group’s factory output gauge—had the largest monthly advance since March 2021 and is at the highest level since November 2022. The majority of respondents stated “employment … Read more
Job openings in April fell to the lowest level in over three years. Available positions decreased to 8.06 million from a downward adjusted number of 8.36 million in the prior month according to the JOLTS Job Openings Survey. The figure was below all estimates in a Bloomberg survey of economists. Placing the data into perspective, … Read more
The ISM Manufacturing gauge shrank in May at a faster pace than expected as a measure of new orders fell by the most in nearly two years. The headline data was the weakest in three months.For the moment, the weakness in the statistics is being interpreted as the large increase in the overnight rate is … Read more
The bond market rallied as the inflation data met expectations, but mega sized tech at one time declined about 2% before a late day surge. As noted last week, during the month of May mega cap shares advanced as Treasuries swooned, the inverse of the expectations.Overnight index swap contracts tied to upcoming Fed policy meetings … Read more
Markets were relatively quiet as the data largely met expectations. Equites declined about 0.5% and Treasuries rallied across the curve.Federal Reserve Bank of New York President John Williams said he expects inflation to continue falling in the second half of the year, adding that elevated borrowing costs are restraining the economy.Williams said that while inflation … Read more
