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 […]
Data Not Conducive to Wall Street’s “Soft-Landing” Scenario
One of the two major economic/market events that occurred last week (week of August 20) was the stellar performance of Nvidia (NVDA) which, unlike the retailers, beat on both top and bottom lines and whose stock price has soared from a 112 low last October to a high print of nearly 503 early on Friday […]
Why the Fed is Bluffing
As expected, the Fed “paused” after 10 straight rate hikes. They characterized this as a “skip,” not a “pause,” as the former implies the rate hiking regime is still in place while the latter has been construed to mean that the hiking cycle is over. The Fed does not want to convey that for fear […]
The Silicon Valley Bank Insolvency and the Oncoming Recession: Blame the Fed
The big market-moving event of the week was supposed to be the February jobs numbers on Friday (March 10), but there was never a mention of those numbers in the financial media, upstaged by the second largest and completely unexpected bank failure in U.S. history, i.e., Silicon Valley Bank (SVB). The real issue here, which […]
The Fed Wins – Rates Higher for Longer
The Implications This week, there were three major data releases – the Consumer Price Index (CPI), Retail Sales, and the Producer Price Index (PPI), all for January. The CPI met expectations, rising +0.5% for January. The Retail Sales number at +3% beat the consensus estimate of +1.9%, and PPI came in a little hot. Markets […]
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 […]