February’s unemployment data was largely as expected, perhaps some hints of softening as for example a decline in the labor participation rate to a two-year low, but otherwise the data is largely in line. However, the fast-moving events of recent weeks have not been captured in February’s data. The real test for how public spending … Read more
The NASDAQ is close to correction territory as the Magnificent Seven continues to decline as evidence is lacking that AI investments are yet bearing fruit. Bloomberg writes the “there is a real unwinding of the momentum trade, with fears rising that perhaps momentum may now be in the other direction.” A basic premise for any … Read more
The ISM Service Index advanced in March rather than declining from February’s level. More importantly, the services employment index climbed for a third month to the highest since December 2021. Moreover, a measure of costs paid for material and services increased to one of the firmest readings since early 2023, underscoring the challenge Federal Reserve … Read more
The S & P 500 has reversed its post-election rally and part of this downturn was credited to tariffs. There is a near unanimity that tariffs will cause inflation and slow down the economy. How accurate is this view? There was also near unanimity [including the Federal Reserve and most money banks] that exponentially increasing … Read more
Equites reversed gains following a “tough discussion” between the US and Ukraine, raising concerns about geopolitical risks. The President stated that Zelenski “can come back when he is ready for peace.” Shares then again reversed themselves as the markets concluded the dust up between the US and Ukraine was only cheap TV theater and focused … Read more
Equites were mixed. The tech mega caps sold off as NVDA disappointed as shares were priced beyond perfection. NVDA ended lower by over 8.5%, a primary catalyst for the 2.8% drop in the NASDAQ. The Dow closed about 0.35% lower. Treasuries sold off across the spectrum as revised GDP data indicated that the Federal Reserve’s … Read more
Two weeks ago, “it was almost a certainty” that the Federal Reserve would not lower interest rates in 2025 and there was a growing minority believing the Central Bank might actually raise rates. Today the market has fully priced two quarter point cuts this year and most believe a third one is possible in 2026. … Read more
The cross currents are incredible. According to a Havard/Harris Poll, 72% of respondents support DOGE objectives. The breakdown is as follows…9 out 10 Republicans surveyed support DOGE…70% of Independents and 60% of Democrats. As written several times, the President’s agenda has increased uncertainty in the markets, albeit this uncertainty has not yet translated into greatly … Read more
Bloomberg writes for the fifth consecutive session value stocks are beating growth as the info tech sector lags. Value has not beaten growth in six straight sessions since the start of 2022. For the month, growth stocks are down 3.7% while value is up 0.2%. Bloomberg writes that over 350 S & P 500 companies … Read more
Are inflationary expectations about to become unanchored, a horrifying question given that the county is $37 trillion in debt and interest expense is now over $1.1 trillion, up from $350 billion four years ago? A major determinate of bond yields and monetary policy is inflationary expectations. Inflation is defined as too much money chasing to … Read more
