As Inflation Fades and Incoming Data Disappoint The Fed Appears Intransigent
The headline CPI reading of no price inflation (0.0%) in October surprised the financial markets (but not us). It caused a bond market rally as yields (especially on the long end) fell. Then the PPI (Producer Price Index) showed up with a negative number for October (-0.5%), and this is generally a harbinger of what […]
Despite a Strong Payroll Report and a “Hot” September CPI Inflation Continues to Cool
The newly declared “war” in Israel adds to global economic uncertainty. The human tragedy is, of course, horrific, and we are saddened by it. There are, however, unknown economic implications, not only around the military responses, but also involving fiscal responses and the implication for major oil producers. It’s too early to draw any conclusions, […]
The Rate Spike Will Damage the Recovery
Fed Intervention Needed There was quite a spike in interest rates the last week of February with the 10-Year T-Note spiking from a 1.36% level as of the close on Wednesday to as high as 1.60% intraday with a close of 1.55% on Thursday. Friday’s close was 1.45%. But, a lot of damage was done. […]
The Economy: Damaged Labor Markets; An Inflation Head Fake
On Friday, February 5, markets were set to rise no matter what the employment data showed. If they beat to the upside, that would validate the reflation/pent-up demand narrative. If they disappointed, well, that would simply mean more fiscal and monetary largesse (which financial markets love). Either way, heads markets rise; tails, ditto. Labor Market […]
Bubble Markets Display Bizarre Behavior
Right Before They Tumble Like the Dot.Com bubble of the late ‘90s, the typical signs of an approaching bubble bust were on full display in the equity markets last week (week ending January 29th). GameStop (GME) and other failing or troubled companies (AMC, Blackberry, Nokia, Bed Bath) have become the darlings of the WallStreetBets (WSB) […]
“V” vs. “u” and the Flawed Inflation Narrative
The equity markets finally took a breather last week (ended January 15th), with the S&P 500 falling a mere 1.5%; that’s down from its record high a week earlier. Perhaps the really poor economic data played a role, but then again, equity markets like such poor data because it means more stimulus (Biden’s $1.9 trillion […]