Market Commentary

Daily reports from our Chief Economic Strategist.

A SHORT MACROECONOMIC DISCOURSE
Equities rose on light volume as all focused upon the Fed’s surprise decision. I will continue to argue that unless external risks rise, the central bank will be forced to change its stance in the immediate future. I ask what happens if China’s economy turns up in the second half of the year, a trade deal is signed and the UK does not crash out of the EU without a trade deal? The above is very
WOW! A BIG SURPRISE
Wow! That was a surprise. The Federal Reserve was considerably more dovish than anticipated, suggesting no rate hikes for the remainder of 2019 and only one in 2020. As early as yesterday morning, the Fed was perhaps suggesting 2 hikes in 2019. The Committee downgraded
IS IT ALL ABOUT WAGES?
All are expecting a dovish Fed statement at the conclusion of its two day meeting. Many are perplexed by the lack of wage inflation given the low unemployment rate. Will the Fed address the labor participation rate (LPR) as a primary cause, a rate that is still considerably lower than its
A MIXED DAY
Equity markets were mixed following a report that a meeting between China and the US to end the trade war is now likely to happen in April at the earliest. Many, including me, believe a trade deal is fully priced into
ARE MARKETS REVERTING BACK TO OLD NORMALCY?
Equities were mixed yesterday as the NASDAQ led by the technologies advanced and the Dow fell. Equity volume was muted. Treasury yields were relatively lower and oil rose after Saudi Arabia announced even deeper cuts and Venezuela is
A MIXED DAY
Equities were mixed yesterday as the NASDAQ led by the technologies advanced and the Dow fell. Equity volume was muted. Treasury yields were relatively lower and oil rose after Saudi Arabia announced even deeper cuts and Venezuela is
A “BIZZARE” LABOR REPORT AND HIGH FREQUENCY TRADING
February’s jobs data was surprise. Payrolls rose by the smallest amount in more than a year but prior months were revised higher. Wages rose more than expected rising by the greatest pace in over a decade and the labor participation rate remained unchanged. The unemployment rate fell to a
I BELIEVE IT IS ALL ABOUT THE LABOR PARTICIPATION RATE
Many times I have discussed the labor participation rate (LPR). The LPR is quickly rising in stature as the unemployment rate indicates an economy close to full employment. I have often remarked a major reason for today’s low unemployment rate is result of the large number of workers who left the workforce for a myriad of reasons including skill mismatch and transfer payments. If these workers were still counted in the workforce the unemployment rate would be closer to 8% versus 4%.
POLITICS, THE LPR AND VALUE INVESTING
Will political uncertainty begin to weigh upon equity prices? The world is dramatically changing. The EU holds elections in May and right of center parties are expected to capture over a third of the seats. France’s President Macron is desperately appealing to the populace to continue with the
A VERY CONCENTRATED MARKET AND FEDERAL TAX REVENUES
Many times I have commented about the narrowness of the markets, the breakdown of “fail safe trading strategies,” and the intense concentration of funds into a handful of names. Yesterday Goldman further quantified this view stating the
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