Markets Pay Little Attention to Emerging Data That is, Until They Do

The S&P 500 hit an all-time high on Thursday (January 25) on the heels of an unexpectedly robust +3.3% annualized growth rate of real GDP for Q4. Market expectations had been for a +2.0% print, and even the normally optimistic Atlanta Fed GDP Now model was only calling for +2.3% The chart shows the sources […]

Upon Further Review – The Labor Market Is Cooling

On Friday (January 5th), once again, the Non-Farm Payroll (NFP) number (+216K) handily beat the +175K consensus estimate for December. Immediately after the release, equity markets, via the S&P 500, spiked +0.75% (35 points) to 4,721 from 4,686, as did bond yields with the 10-Year Treasury rising 8 basis points to 4.08%. But, by day’s […]

Despite “Strong” Jobs Report, Recession Still Locked In

November’s jobs report surprised to the upside. Nonfarm Payrolls (NFP) rose +199k, close to the +185k consensus view. But, it was the sister survey, the Household Survey (HS), that shocked the financial markets, as it rose +747k, more than doubly offsetting its -348k fall in October. So, it isn’t a surprise that the Unemployment Rate […]

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 […]

Recession: The Stars Continue to Align

The oft forecasted Recession hasn’t yet appeared. Has it been avoided (i.e., “soft-landing”)? A look at the growing evidence leads us to conclude that the Recession is coming; we suspect that when the NBER gets around to dating it, this quarter (Q4) will mark its beginning. The first evidence of this showed up in the […]

The Fed is Done Hiking – What Could Possibly Go Wrong?

Sometimes “bad news” is “good news.” That seemed to be the case on Friday when the jobs report came in weaker than expected. That, combined with the Fed’s continuing rate “pause” on Wednesday ignited the financial markets – both equities and bonds. Among the popular averages, the DJIA gained 5.1% on the week, the S&P […]