At casual glance it appears most are ignoring the government shutdown. While this is the first shuttering since 2018, there has been 21 since 1976. Maybe the impact of such has gone the same way as a dial on a TV. There were ample commercials stating, “don’t touch that dial.” Today many have no idea … Read more
Short-dated Treasury yields fell yesterday as the private sector ADP Employment Survey unexpectedly dropped in September. The market increased the amount of possible Fed easing by year’s end to 46 bps from 42 bps right before the data was released. ADP noted that their data has been “recalibrated” as more information became available from prior … Read more
At the time of this writing a government shutdown is all but assured. As widely discussed, shutdowns are both market and economic nonevents but can create sensationalist headlines. The President has threatened to fire “scores of federal workers” in the event of a shutdown perhaps accomplishing what DOGE did not…a paring of the federal workforce. … Read more
If there is not a government shutdown, Friday is the release of the all-inclusive BLS Employment report. However, can a case be made that this influential survey is outdated? A major component of the survey is non-farm payrolls—a vestige of 90 years ago when over 25% of society was involved in agriculture. Today it is … Read more
The Federal Reserve’s preferred measure of inflation met expectations. The core personal consumption expenditure index (PCE) rose by 0.2% in August as compared with a 0.3% increase in July. On an annual basis, the core measure remained at 2.9% considerably higher than the 2.0% mandated speed limit. Equites treated the report positively as it offers … Read more
Final revisions of second quarter GDP indicated the economy grew at the fastest pace in two years. That data however is dated. The Federal Reserve Bank of Atlanta’s GDPNow estimate, however is predicting a 3.3% growth rate in the July-September period. How accurate is this assumption? As written many times the unexpected is continuing to … Read more
It has been more than five months since the S & P 500 had back-to-back decline of at least 1%. Complacency is at bubble like proportions as the euphoria over AI is inducing a virtuous feedback loop that is turning skeptics into equity buyers at significantly higher levels. Equity performance has become even more concentrated … Read more
FRB Chair Powell’s speech broke little new ground. Powell commented about the conflict of the Fed’s dual mandate (downside risks to employment and upside risks to inflation). As noted last week, Powell stated for now the labor market risks are paramount, which is why the Fed eased policy. Powell characterized the current stance of policy … Read more
Economics is about decision making and perhaps in a broad sense it appears that decisions today are being made differently than before the pandemic. Generally speaking, perhaps few fully understand how much has changed for employment, inflation, consumer behavior and more. This level of anxiety is present in almost every aspect of society. If one … Read more
The S & P 500 has gained about $15 trillion since its April lows, an advance partially predicated upon the predictions of a more docile Federal Reserve that could potentially bolster the outlook for corporate earnings. As noted last week, there is a very weak consensus of a dovish Federal as almost half of the … Read more
