Obtuse: The Fed & Treasury View of Banking Issues
Despite ongoing silent runs on the Regional and Community Banks, it appears that both Fed Chair Powell and Treasury Secretary Yellen view the events of the recent past (SVB, Signature Bank, First Republic, Credit Suisse, and now Deutsche Bank) as one-off events and not symptomatic of stress in the world’s financial system. The dictionary defines […]
CPI Will Set the Tone for Financial Markets
It was a light week for economic data, giving markets time to digest and analyze the prior week’s Fed meeting and the unexpected jobs numbers. By Friday (February 10), with the Fed’s unanimous FOMC view that the future held interest rate increases (plural) and reinforced by the spectacular +517,000 jobs numbers, the markets threw in […]
Upon Further Review: That “Hot” Labor Market Is Really “Ice Cold”
There are two surveys put out every month: The Payroll or Establishment Survey, which is the one that gets the headlines, and the Household Survey. The Payroll Survey only surveys large and medium-sized businesses and counts the number of jobs. The Household Survey calls on households and only asks if people in the household are […]
Employment Headline Hopeful – Ignore the Details at Your Peril
The big story of the week was the +263K jump in Nonfarm Payrolls, somewhat higher than the street estimate of 200K, now causing some pundits to say that a “soft landing” is now likely for the economy. Unfortunately, the headline number is quite misleading. The Payroll Survey is a survey of larger businesses and counts […]
Employment Report – Not What Meets the Eye
Fed Near End of Rate Hikes The big news today was that payrolls increased by +261K. This caused markets to rally (shoot first, ask questions later). Interest rates moved up because the headline +261K may cause the Fed to be even more hawkish. Nevertheless, beneath the veneer, this was a very weak employment report. There […]
Wall Street Narratives Distort Reality
A Deep Recession Is Rapidly Approaching Volatility remains the major feature of financial markets. You are correct if you interpret the word “volatility” to include a downtrend in equity prices. This is the kind of action one normally sees in a “Bear” market. The table below shows the changes in the major U.S. indexes from […]