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 […]
Rates Spike, Sentiment Softens – Real Inflation Already at Target
Is a Recession Imminent? The relentless upward spike in interest rates continued this past week despite Fedspeak implying that the Fed will continue to be in “pause” mode, at least at the November 1st meeting. Rates on 10-Year Treasury Notes closed on Friday (October 20) at 4.91%. During the trading day, the 10-Year almost pierced […]
The Recession: It’s Here
Inflation Prognosis: Lower Equity investors just endured the worst first six months of any year since 1970. This occurred despite a “Bear Market” rally in May. For the month, the S&P 500 was down -8.4% (see last column of table) as was the Russell 2000, with the Nasdaq down -8.7% and the DJIA -6.7%. All […]
Delta-Variant, Soft Data Bode Ill for Near-Term Growth
The markets waited all week for Fed Chair Powell to speak at the Kansas City Fed’s Annual Jackson Hole Symposium. Due to the Delta-variant, like many other business meetings, this one was held virtually. There was growing market concern that Powell would turn somewhat more hawkish, especially since some Regional Fed Presidents appear to have […]
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) […]
The Economy Slows; The Real “New Normal”
The virus’ resurgence has caused more business disruptions, raising the specter of a renewed economic slowdown. Spending and income numbers have mainly been negative in Q4, and the much hoped for stimulus relief package is now stuck on the president’s desk. The Economy “Drop in Spending, Higher Claims Cloud Outlook for Growth,” WSJ, 12/24/20, A1. […]