Some pointed to the headlines that a Danish pension fund is planning to exit US Treasuries for the selloff in the UST and the equity markets. The odds of wholesale selling are extremely low as it is the proverbial nuclear option…MAD III. [MAD is the cold war acronym of Mutual Assured Destruction…MAD I was not … Read more
Markets are climbing a wall of worry. Valuations are historically high. The geopolitical environment is changing every day. Is the Administration bullying the Fed? The President is demanding a 10% cap on credit cards. Societal pressures are at levels not experienced since the early 1970s. The national debt and the interest coverage on it is … Read more
Led by the mega caps, equites slid again on several reasons. Wholesale inflation (PPI) rose slightly in November from a month earlier, driven by higher energy costs. Some believe this is structurally problematic as producer prices are running well above consumer inflation and the gap is widening. Typically, when this happens, margin compression occurs or … Read more
The core CPI rose less than expected, rising by 0.2% from November versus the 0.3% expected increase. On an annual basis it advanced 2.6%, matching a four-year low. There was some bounce back in shelter costs, which were the largest factor in the overall monthly advance according to the BLS. OER is still the greatest … Read more
Is the Administration on the verge of losing major Wall Street support? Bloomberg writes It is hard to see the Justice Department’s criminal investigation of Fed Chair Jerome Powell, purportedly for statements surrounding the renovation of the central bank’s headquarters, as anything other than the latest iteration of Trump’s campaign to subjugate the Fed—it is … Read more
The Supreme Court did not weigh in on the fate of the President’s tariffs. Wednesday is the next “Opinion Day” according to Bloomberg. Market attention was then focused on the data that reinforced views that the Federal Reserve will leave interest rates on hold for the near term. The jobs report was a mixed bag, … Read more
The Supreme Court is potentially expected to issue a ruling today that could potentially reshape the President’s trade agenda. At issue is the scope of presidential authority to impose tariffs under long standing trade laws. It is largely expected the Supreme Court will rule against the President, creating yet even more uncertainty with many believing … Read more
Treasuries were buffeted by mixed indications on jobs. At the time of this writing, the market is still suggesting at least two interest rate cuts this year. The ADP Private Sector Employment report fell short of the median forecast of 51,000 jobs created. The data suggested only 41,000. Another employment indicator, JOLTS job openings for … Read more
Monetary policy optimism gave equities a nominal boost. Richmond Fed President Tom Barkin stated the policy outlook remains in a delicate balance given the conflicting pressures from rising unemployment and still high inflation, but rates are around the “neutral rate” or the rate that neither adds nor detracts from growth. Today is a data dump … Read more
There was little reaction to the headlines that manufacturing activity shrank in December by the most since 2024. The measure has been in “contraction territory” for 10 consecutive months. The reason for the decline is that producers are drawing down their raw materials inventories at the fastest rate since October 2024 thus suggesting later strength … Read more
