Selling Caterpillar on the President’s tariff announcement
I don’t think there’s any point to waiting around to see how quickly or fiercely China will retaliate against U.S. exporters after today’s announcement that the United States will put a 25% tariff on Chinese (and other imported) steel and a 10%...
Selling Boeing shares on the President’s tariff announcement
I don’t think there’s any point to waiting around to see how quickly or fiercely China (and the European Union) will retaliate against U.S. exporters after today’s announcement that the United States will put a 25% tariff on Chinese (and other...
Possibly meaningless Chinese economic data lead global markets down
Overnight numbers showed that China’s purchasing managers index for manufacturing fell to 50.3 in February. That was down from 51.3 in January and the biggest drop in five years. Economists surveyed by Bloomberg had expected a reading of 51.1 in the index. The...
Fed chair testifies: So much for Goldilocks
For a moment this morning–before the actual testimony by new Fed chair Jerome Powell had ended but after Wall Street had read his prepared remarks–stocks moved ahead on Wall Street’s favorite story, Goldilocks. Powell seemed to be saying that...
Projections for U.S. oil sale production call for faster, higher, longer
The executive director of the International Energy Agency today said that “explosive growth” in U.S. oil production from wells in shale geologies is likely to extend beyond 2018. As you might just imagine, an oil market that is struggling to believe that...
An inflation test for the new guy at the Fed
Ahead of congressional testimony tomorrow by new Federal Reserve Chairman Jerome Powell, Wall Street is buzzing with speculation that the Powell Fed will be willing let inflation run higher than its current target of 2%. Maybe as high as 2.5%. Some of this is clearly...
This is as good as it gets, says Goldman Sachs: Why that’s important to you in thinking about the next leg in this stock market
On Thursday February 22, Goldman Sachs wrote in a note to clients that the economic macro data as likely to be “as good as it gets.” This isn’t, in my opinion, a call for an immediate plunge in the markets. But with U.S. stocks trading near all time...
10-year Treasury yield back to 2.87% as market decides wage inflation isn’t likely to push the Fed to three rate increases in 2018
Traders and investors decided today that the Federal Reserve’s semiannual monetary policy report to Congress is wrong and that Wall Street’s own seers are right about wage-driven inflation. The Fed’s report, delivered to Congress today, makes it...
Treasury auction today could have been worse; yields climb anyway
The U.S. Treasury auctioned off $35 billion in 5-year notes today. The yield climbed to 2.658%. In trading the 5-year Treasury closed at 2.68% today. That yield is up 23 basis points in the last month. The yield on the 10-year Treasury note closed at 2.94%, up 5 basis...
Federal Reserve minutes show bank upping estimates of growth in 2018–and projecting need for more interest rate increases
Today’s release of the minutes from the Federal Reserve’s January 30-31 meeting show the central bank estimating economic growth at 2.5% for 2018 and noting that the outlook for stronger economic growth raised the likelihood for continued, gradual interest...
10-year Treasury climbs to 2.91% on less than enthusiastic bills auction
Not a good way to begin if you have to sell $441 billion in net debt in the first quarter of 2018. This morning the U.S. Treasury sold $96 billion of short-term bills at yields unseen since 2008. At auction the government sold $51 billion of three-month bills at a...
Saudis push OPEC to go for $70 a barrel
The goal was to cut production enough to reduce global oil inventories to their five-year average. The hope of the coalition of OPEC and Russia that reduction in production would get oil prices up to $60 a barrel. Now with that inventory reduction just about in place...
Big earnings report from MGM Resorts before the market open tomorrow
Tomorrow’s earnings report from MGM Resorts International (MGM) could be make or break for the call options that I hold on this stock in my Volatility Portfolio. The options have been all over the block in recent weeks from up 50% to down 30% on market...
Get ready for the deluge in the Treasury market this week
With the U.S. financial markets closed for Presidents’ Day and with markets in China and Hong Kong still closed for the Lunar New Year, it’s a slow news day for stocks and bonds today. But get ready for the action to resume on Tuesday with much of the...
What we learned in this rout: This is what a late stage market looks like
Before this market rout and from the safety of the World Economic Forum in Davos, hedge fund legend Ray Dalio talked about the coming bear market in bonds and likelihood that we were near the end of this cycle of economic boom. Sometime in the next two years, he...
V bottom or double top before deeper correction
As of yesterday the Standard & Poor’s 500 stock index had climbed 5.8% in the last five trading sessions. That recouped much of the 9.03% drop (not quite an official correction of 10% or more) from January 26 through Februry 8. Which, of course, raises the...
More evidence today that inflation is creeping higher
No index here with the headline clout of yesterday’s CPI (Consumer Price Index) but the message from three indexes today reinforces the story in yesterday’s CPI data: inflation pressures are increasing. The Empire State Manufacturing prices-paid index...
Inflation continues to creep higher in today’s CPI report; Treasury yields rise again
Headline CPI (Consumer Price Index) inflation climbed 0.5% in January, the Labor Department announced today. That was above the 0.4% increase expected by economists surveyed by Briefing.com. (Economists surveyed by Bloomberg had expected a 0.3% increase.) Core CPI,...
Bristol-Myers puts up potential $3.6 billion in deal for 35% of a Nektar cancer drug
In the deal announced today Bristol-Myers Squibb (BMY) pays Nektar Therapeutics $1 billion upfront, $850 million for stock valued at a price of $102 a share, and a potential $1.78 billlion in milestone payments in exchange for access to NKTR 214, a drug candidate...
Diamondback Energy beats on earnings and starts dividend
After the close of New York trading today, Diamondback Energy (FANG) announced fourth quarter earnings of $1.56 a share (excluding one-time items). That beat the Wall Street consensus by 5 cents a share. Revenue climbed 116% year over year to $399 million, above...
Higher long-term volatility lurks in widening spread of interest rate forecasts
Today Goldman Sachs projected that the yield on the Treasury 10-year note will climb as high as 3.5% in the next six months. In addition, the Wall Street giant told Bloomberg, the U.S. Federal Reserve will raise rates four times in 2018. The yield on the 10-year...
A constructive day but the short-term key remains CPI inflation on Wednesday
The Standard & Poor’s 500 and the Dow Jones Industrial Average both finished in the green today, up 1.39% and 1.70%, respectively, after having held off a bout of selling around 3:46 p.m. New York time. Volatility also made progress on returning to normal....
Chinese stocks bounce back on better than expected but still tight liquidity
As is so often the case, liquidity was the driver for Chinese stock today, Monday. The Shanghai Composite Index rose 0.78% to 3,154.13 points by the close of trading Monday, after initially falling 0.45% during the morning. Two indexes with more exposure to...
China slides into correction too: Are Chinese stocks better buy on the dip candidates?
While our eyes have been glued to the volatility in U.S. markets, Chinese stocks have staged their own correction. The Shanghai Composite is down 12.1% from its high on January 24 to the low on Thursday, February 8. With the Lunar New Year and the week-long Spring...
The financial markets are in shock at Washington’s debt plans
Notice that the signing of a bill early this morning to keep the government open and to fund operations for two years hasn’t resulted in a serious rally in either stocks or bonds. As of 11:30 a.m. New York time the Dow Jones Industrial Average was off 0.18%, or...
Forget about stability–bond fears driving stocks lower again
Here we go again. After a pause that raised hopes that the slide in U.S. stocks was over, today the sell off has resumed. As of 3:30 p.m. New York time, the Dow Jones Industrial Average was lower by 2.53%, or 629 points, to 24,264. The S&P 500 stock index was...
Price tag for keeping the government open: $500 billion added to deficit
The Senate is set to vote later today on a deal that would fund the government for two years and add $500 billion in new spending to a deficit already pegged at north of $1 trillion. The deal is extremely likely to pass the Senate–it’s got something for...
Bond market weakness returns on pause in rout, weak auction
With a pause in the Friday/Monday stock market rout, the bond market isn’t getting support from a flight to safety (at least for the moment) and worries specific to the bond market have remerged as the leading factor in bond yields. Today the yield on the...
S&P 500 erases its gains for 2018; with index down 4.1% today, Wall Street looking for 10% drop from 2018 high
Is this starting to get serious? Wall Street still doesn’t think so. With the Standard & Poor’s 500 down 4.1% today, it has wiped out all of its 2018 gains. Wall Street continues to look for no more than a 10% drop for the January 26 high total...Jim’s Daily Email Alerts:
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