Oct
13
Last Friday’s strong payroll report noted a robust and healthy labor market – which is the last thing the market wants to hear. The market wants to hear weakness and while there are many signs that some components of inflation are cooling and headed lower, the labor market isn’t one...
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Oct
07
This morning’s non-farm payroll report might have noted the weakest gain since April 2021 but there’s not enough damage in the labor market yet to cause the Fed to “pause”. +263k new jobs was in line with market expectations. Another +75bps hike in Fed funds rates in early November is now...
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Oct
06
We talk a lot about breadth because ‘participation’ to the upside is vital for a sustained move higher. We want to see the majority of troops following the general! Additionally, the start of new bull markets are marked by breadth thrusts. These thrusts are indications that the market has moved...
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Oct
05
Yesterday’s job openings (JOLTs) data notes a weakening in the labor market. Tighter financial conditions clearly starting to impact labor demand. Job openings fell by -1.1m openings, the single largest monthly decline since before the pandemic. The importance of this to the markets is that this data is both important and closely...
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Oct
04
One of the commonly quoted measures of a recession is the ISM Manufacturing data going below a reading of 50. >50 means economic expansion and <50 means economic contraction. Yesterday’s ISM data was soft, coming in at a reading of 50.9 vs. an estimate of 52 and a prior month reading of...
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Sep
30
As we have discussed in prior communications, the Fed has been aggressively hiking interest rates in order to slow down the economy and get inflation under control, and it is making no mystery of the fact that it is willing to cause a recession if that is what it takes....
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Sep
29
Another quarter is soon drawing to a close and investors will once again turn their focus to the latest corporate results. With the next round of news on inflation and the Federal Reserve still a few weeks away, earnings announcements will take center stage and help to shed light on...
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Sep
26
Fed chair Powell’s folly continues. It’s quite the body of work. First problem was doing nothing in 1Q22 as inflation was rising and the Fed kept money printing/bond buying. Second problem was initiating rate hikes too little and too slow in 2Q. Now the problem is Powell talking tough and raising rates while...
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Sep
22
Pardon the reference to the great Earth, Wind and Fire lyrics but yesterday’s performance by Fed chair Powell was uber hawkish, lots of tough talk about rates and inflation and the path forward. Not really a lot good to take out of it so I won’t try. I wish he was half...
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Sep
20
As markets brace for the Fed’s rate decision tomorrow 2pm EST (+75bps overwhelming consensus…it’s already priced in and known), economic demand continues to be destroyed and inflation expectations are falling. Gold down -18% over past 8 months, lumber prices down -65% over past 8 months, shipping freight rates down -52% over...
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