A Slower Economy, Lower Inflation The Odds of a June Rate Cut Are Significant

During the last week in March, there were several significant foreclosures (hundreds of millions of dollars per property). They included properties in SanFrancisco and Mountain View, CA, a large complex in Washingdon, D.C., and a medical office building (still under construction) in the southern part of Florida.   Leveraged loan delinquencies now exceed 6% (normal is […]

Headline Data Look “Strong,” But Contradictions Abound

The January Non-Farm Payroll (NFP) number was always destined to be a market mover, especially after Fed Chair Powell said that, while the Fed will be lowering rates in 2024, March was not their base case. The +353K NFP number (consensus was +185K) with December’s number revised up to 333K from 216K, and the +0.6% […]

Fed Drives S&P 500 To Record Levels, Economic Fundamentals Still Soft

Holiday sales look flat. While online sales were up, sales at traditional retailers were lackluster. Penney’s, Kohl’s, L Brands, Macy’s, Urban Outfitters, Bed Bath & Beyond, all reported lower sales vs. a year ago. Meanwhile, in what looks to be a “frugality” or “trade down” movement on the part of the consumer, same store sales at Walmart, Costco, […]

The Deer in the Headlights

The big event of August, the one that was going to move markets, was supposed to be Jay Powell’s remarks at the KC Fed’s annual symposium at Jackson Hole.  Turns out, his speech was a non-event! The Powell Non-Event The media made it their purpose, prior to his speech, to spotlight the fact that the […]

Fallout From Fed Dovishness

The rate setting committee of the Fed met on Tuesday and Wednesday, March 19 and 20. What the Market Saw and Heard From their formal statement and press conference, the equity market saw and heard only what it wanted, at least at first, and equity markets rose on Thursday, March 21st (Dow Jones +217): No rate […]