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SOME DISTURBING DEFICIT PROJECTIONS

Will the deficit and the national debt become a campaign issue?  Neither candidate has addressed the issue even though it is likely it could become something of significance in the intermediate future. It should be noted that a dated Gallup Poll  (April) indicated that 40% of people aged 18-35 believe that fiscal issues are the … Read more

ARE WE CLOSE TO A MINSKY MOMENT?

Markets became quiet Tuesday afternoon ahead of a rare mid-week holiday.  Treasuries held their gains following a lackluster retail sales report.  The data underscored a notable downward shift in consumer spending after stronger than expected readings earlier in the year.  On the other hand, industrial production increased in May at a pace greater than expected. … Read more

A DISCONCERTING SURVEY

All markets were relatively quiet yesterday. Equites led by the mega caps traded higher while Treasuries declined nominally in price, perhaps the result of a deluge of offerings.The narrative is rising about the single sidedness of the market. According to Bloomberg, there have only been six occasions in 20 years on which a single sector … Read more

WILL THE MARKETS RETURN TO THE OLD PARADIGM?

Most were taught that money will ultimately gravitate to the sector or companies that present the greatest value with the least amount of risk. Considerable attention has been focused on the massive concentration of wealth in five or ten companies.  Five names comprise a record of over 28% of the S & P and ten … Read more

WAS YESTERDAY A DAY OF SIGNIFICANCE?

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

CPI AT 8:30 AND FED STATEMENT AT 2:00

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

A QUIET DAY

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

MAY’S LABOR REPORT GREATLY EXCEEDED EXPECTATIONS

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 RELEASED AT 8:30

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