A Bloomberg headline Friday read “AI Craze Powers Best Week in 2024 for Stocks.” The earnings induced surge in both MSFT and GOOG coupled with an inflation report that largely met expectations was the catalyst for Friday’s advance.The monetary policy narrative has radically changed with the markets now “reasonably assuming one interest rate cut, maybe … Read more
The headlines of the initial estimates of first quarter GDP were ugly. GDP rose at a 1.6% annualized rate, below all projections. What was perhaps more disturbing were the pricing pressures. A closely watched measure of underlying inflation advanced by 3.7%, also exceeding all estimates. Is stagflation at hand? Both the equity and Treasury markets … Read more
Treasuries remained under pressure as the jumbo sized $70 billion 5-year Treasury auction was met with demand slightly below expectations. Some had anticipated strong demand given the recent back-up in yields that are around multi decade highs. How will today’s $44 billion 7-year Treasury auction bet met? Some are beginning to publicly question whether the … Read more
Equites rose on earnings optimism. As written yesterday, Bloomberg reported a record 63% of the 409 respondents to its poll expect earnings to give equities a boost. This is the highest vote of confidence for corporate profits since the poll began asking the question in October 2022 according to the newswire. The markets may know … Read more
Treasuries rebounded nominally yesterday after a brutal selloff that sent yields to their highest level since November. Equities however struggled amid a slide in tech megacaps. Bloomberg reports the equity risk premium—a measure of the differential between stocks and bonds expected returns-is now deep in negative territory, something that has not happened since the early … Read more
The two-year Treasury, or the instrument most sensitive to monetary policy is broaching 5%, the highest level since November.
Yields across the Treasury spectrum continue to rise, broaching the levels experienced last November. March’s retail sales data, which exceeded almost all public estimates, was the
Equities sold off on Friday as perhaps the fear trade has reemerged. Both Treasuries and oil rallied on headlines that Israel is preparing for an imminent attack from
Producer Prices increased in March from a year earlier by the most in 11 months, highlighting the sticky nature of inflation. The headline number was 2.1% from March 2023 while the core rose by 2.4%. The data largely met expectations. Markets were bifurcated on the data. The Dow was essentially unchanged while the NASDAQ advanced … Read more
March’s CPI topped forecasts for a third straight month, heralding a fresh wave of price pressures that may likely delay and Federal Reserve interest rate cuts until
