Market Commentary

Daily reports from our Chief Economic Strategist.

SOME THOUGHTS ABOUT THE FED AND NEGATIVE INTEREST RATES
It is a forgone conclusion the FRB will lower interest rates tomorrow. Consensus is expecting a 0.25% decrease. Friday’s data lowered the probability of a 0.50% cut. There are few who think the
SECOND QUARTER GDP, GOOGLE, THE FED MEETING AND JOBS
Initial estimates suggest the economy expanded at a 2.1% annual rate during the second quarter. Analysts had expected a 1.8% increase. The increase was the result of increased consumer spending. Excluding the volatile trade and
GPD AT 8:30
Initial estimates of second quarter GDP is released at 8:30. Analysts are expecting a 1.8% growth rate as the decline in inventories is expected to subtract about 1.3% from growth. This is the inverse from the first quarter when inventory
COMMENTS ABOUT VALUE AND LIQUIDITY
Two consistent themes of these remarks is the discrepancy between value and growth stocks and the lack of liquidity. In many regards I believe they are connected. Commenting about value stocks, Bloomberg wrote yesterday the last time value shares were
SECOND QUARTER GDP RELEASED FRIDAY
It has been an incredible six months. Few were able to predict how quickly the narrative changed from global synchronized recovery to global synchronized slowdown. Even fewer predicted how
AN OLD MARKET AXIOM
There is an old market axiom that the markets can remain irrational longer than one can remain solvent. Bank of America commented yesterday that today’s market is the most crowded trade in history. The environment is groupthink on
THE LEVERAGE IN THE RISK PARITY TRADES AND THE RELATIONSHIP TO THE BOND MARKET
Most would argue the current advance is predicated upon a dramatic change in monetary policy. The bond market has fully discounted a 34% drop in the overnight rate in four months, one of the sharpest declines in monetary history, a decline that is
POWELL’S TESTIMONY COMMENCES AT 10:00 AM
FRB Chair Powell testifies to Congress today about the state of the economy. The market has fully discounted a 0.25% reduction at the conclusion of the July FOMC meeting. I rhetorically ask will
POWELL’S CONGRESSIONAL TESTIMONY COMMENCES WEDNESDAY
The main focus for the markets this week looks to be Fed Chair Powell’s remarks before Congress. His remarks can greatly influence the markets. As widely noted and discounted, the markets are expecting at least a 0.25% reduction in the
JUNE’S JOBS DATA ON FRIDAY…THIS IS “NUTS”
Friday the all-inclusive June unemployment data is released. The data could be of considerable significance regarding the outlook for monetary policy. As written many times the markets have discounted a 0.75% in the overnight rate by year end with

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