When “Bad News” Becomes “Good News”

While Tuesday’s Producer Price Index (PPI) for April came in hotter than expected (+0.5%), markets took the bad data in stride, perhaps because the year/year change on the headline index was still only 2.2% (2.4% for the “core,” i.e., ex-food and energy). Another reason for the lack of market volatility from the release may have […]

Don’t be Fooled – The Macro-Economic Picture is Deteriorating

Once again, the Non-Farm Payrolls (NFP) number, at +275K, was well above the consensus +200K estimate. But, that’s where the good news ended. The sister survey, the Household Survey (HS), reported a fall in the number of jobs of -184K. The HS is used to calculate the Unemployment Rate. Since the labor force did not […]

Fed Actions (Inactions) are Key to the Economic Outlook

Over the past week or so, we’ve seen some backup in market interest rates. The 10-Year Treasury yield (chart) closed at a 4.15% on Friday (January 19), up 21 basis points from its 3.94% level a week earlier, and 3.79% on December 26th. The rise in market rates was mainly due to the hawkish tone […]

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 […]

Dysfunctional Credit Markets – Still Waiting on the Fed

As the week ended, U.S. credit markets appeared confused, if not outright dysfunctional.  The 10-Year Treasury yield began February at 1.09% and reached an interim peak of 1.54% on February 25.  Then it retreated to 1.42% as markets thought the rise had simply been overdone.  But Fed Chair Powell’s refusal to assure financial markets regarding […]