The second day of FRB Chair Powell’s Congressional Testimony was again largely a non-event. However, what might be of significance is his comment about the Fed’s balance sheet. Powell stated the Central Bank “has made quite a lot of progress. We think we have a good ways to go.” The Fed has reduced its holdings … Read more
FRB Chair Powell’s comments were largely a non-event. Powell stated, “more good data” would strengthen confidence that inflation is moving toward the central banks 2% target and “recent readings point to modest further progress on prices.” The Fed Chief further stated that lowering interest rates too little or too late could put the economy and … Read more
Will the election impact the markets? Historically turmoil in the Executive Branch increases volatility. According to Bloomberg, President Biden sent a 2-page letter to Democratic leaders and donors to quell Democratic infighting about his campaign, saying he is determined to remain in the race and challenging dissenters to end talk of his removal from the … Read more
Job openings unexpectedly rose in May, interrupting a months-long downtrend that underscored a gradual slowdown in labor demand. Available positions increased to 8.14 million form a downwardly revise 7.92 million reading in the prior month that was the lowest in three years. Both hiring and layoffs picked up in a sign of churn in the … Read more
Treasuries sold off even as the ISM data fell short of expectations. The sell off was blamed on the Supreme Court ruling that President Trump has some immunity from criminal charges for trying to reverse the 2020 election results, all but ensuring that a trail will not happen before the November election. The market is … Read more
Equites Friday were initially buoyed by a report that core PCE, the Fed’s preferred measure of underlying inflation slowed to the lowest level in May since March 2021 on a year over year basis. The report also indicated household spending rebounded and income showed solid growth. Moreover, consumer sentiment declined by less than initially estimated … Read more
Markets were relatively quiet yesterday as the data reinforced speculation that the Federal Reserve may be able to cut rates this year. Recurring applications for jobless benefits rose to the highest level since the end of 2021, a potential warning sign that it is taking longer for unemployed to find a job. This data is … Read more
For the first time in about 2 years the bond market agrees with the Federal Reserve. It took the first half of the year for the Treasury market to fall in line with a Federal Reserve signaling higher for longer interest rates. The market discounted six or seven rate cuts in January and are now … Read more
Is there a nascent rotation occurring? Everything but growth [aka NASDAQ 100] has outperformed the market the last several days. Yesterday the long-term trend returned as mega tech rose..aka NVDA up about 8% sending the NASDAQ up 1.2% and the rest of the market was flat. It is widely accepted that the markets are grossly … Read more
Bloomberg writes the NASDAQ 100 is “screamingly overvalued with its premium over fair value in excess of 50%” when the technology basket is viewed as a long duration bond. The analysis assumes that dividends that accrue from the NASDAQ 100 will increase at a compounded annual rate of 11%.The brick and mortar S & P … Read more
