Fed pledges to hold interest rates near 0% through 2022–stocks dip anyway
Could this be the first signs that the financial markets are questioning Goldilocks? Investors and traders heard almost everything they could have hoped to hear from the Federal Reserve’s interest-rate setting Open Market Committee meeting today. Sure, the Fed...
Why today’s good news shock on jobs comes at a really unfortunate time
I’d argue the last thing we needed today was good news. In case you’re been hiding under a rock, you know that the economy unexpectedly added 2.5 million jobs in May and the unemployment rate fell to 13.3%. (Read my immediately prior post for a run down of...
Wall Street starts to watch something called the market price/liquidity ratio to justify this rally
The Standard & Poor’s 500 stock index may be closing in on the February 19 record closing high of 3386.15–about 11.2% from the Friday, May 29, close at 3044.31, but some Wall Street strategists see more rally ahead–with a close at the end of...
Even after yesterday’s rip-roaring gains, the S&P 500 is stuck–so what comes next?
Yesterday, May 18, the Standard & Poor’s 500 closed at 2953. We’ve been here before. Several times, in fact. On May 8, the index closed at 2929.80. On April 29, the close was 2939. With the 200-day moving average at 2998.,56, even yesterday’s...
Stocks roar ahead on perfect storm of good news
As of 1 p.m. New York time today, May 18, the Standard & Poor’s 500 is up 3.17% and the Dow Jones Industrial Average is higher by 3.60%. The NASDAQ Composite has climbed 2.47% and the Russell 2000 small cap index is ahead 5.29%. The iShares Emerging Markets...
Now it’s the Fed’s Powell’s turn to push stocks lower, urge Congress to provide more coronavirus money
Yesterday, I argued that the barrage of cautionary comments from Federal Reserve officials seemed designed to talk stock prices lower and to push Congress toward a new bigger coronavirus rescue package. (Why might the Fed want to slow the current rally? The only...
Federal Reserve puts its corporate-bond-buying vehicle in motion
On March 23, the Federal Reserve announced that it would create a facility to buy corporate bunds and ETFs tracking the corporate bond market. That facility remained an all-talk/no-action vehicle until today when the New York Federal Reserve Bank announced that its...
The Fed speaks and speaks and speaks this week: Will all the words push Congress on more spending for coronavirus rescue?
Due to a quirk in the Federal Reserve calendar, the central bank doesn’t meet in May. (Next meeting June 10; last meeting April 29.) That means the Fed has lots of time to jawbone the financial markets and Congress in an effort to get Washington to provide more...
Another reason stocks are rallying? A belief in negative interest rates by early 2021
The Fed funds futures market, which trades bets on where the Federal Reserve’s benchmark interest rates are headed, has rallied this week to send prices for futures contracts in early 2021 above 100. Above 100 traders are pricing in negative interest rates from...
What if the helicopter trillions don’t work this time?
Drop money from the sky. Lots and lots of it. Enough to shock a struggling economy out of a deep slump. Milton Friedman coined the term. In Friedman’s scenario the helicopters appear unexpectedly ( I don’t know if they play Wagner) and just dump money on...
Fed keeps policy stable, says 0% rates as far as the eye can see
As expected the Federal Reserve left interest rates at their current level of 0%-0.25%. And there were very few changes in the central bank’s language. But a few subtle shifts are worth noting, I believe. The Fed said in early April that “We have also committed...
Are we headed into an era of longterm deflation? Will the Fed say it’s worried about deflation after tomorrow’s meeting?
As long as I can remember (which is only back about 40 years when it comes to the economy) the worry has been inflation. From the stagflation of the late 1970s, to Paul Volcker’s brutal but successful assault on inflation in the early 1980s, to the seemingly...
Let’s hear it for stability–thank goodness, so far today is dull on the U.S. market
No big moves. No major disruptions. No threats of meltdowns. Today has been a welcome breather, a bit of stability, for market that’s had more than its share of excitement this week. So far. It’s only 1:30 p.m. in New York. And we could see selling or...
Federal Reserve unveils another $2 trillion loan program for businesses, states, and cities
Saying that the U.S. economy is deteriorating “with alarming speed,” Federal Reserve Chair Jerome Powell unveiled a new Fed program to supply more than $2 trillion in new loans to small, medium and large companies as well as cash-strapped states and...
The coronavirus rescue bill leverages the Fed by $4 trillion to head off a credit crisis–you think it might be serious? Look at the credit card market
On top of the $2.2 billion that the Coronavirus rescue bill now in front of the House of Representatives allocated to checks to individuals, loans and grants to companies, extra unemployment insurance and more, the bill also gave the Treasury the go ahead to backstop...
Fed to provide “infinite” money to credit markets
Today, March 23, the Federal Reserve announced that it would backstop all credit markets in the United States without limits. The Fed said it would purchase Treasuries and mortgage-backed securities “in the amounts needed to support smooth market functioning.” In...
Fed move leaves yen as last safe haven standing
The Japanese yen soared 2% Monday after the Federal Reserve announced that it would cut interest rates and add $700 billion to its balance sheet by buying Treasuries and mortgage-backed securities. The dollar was down 0.66% Monday against the DXY Spot Index, a basket...
More liquidity from the Fed helps reassure financial markets
The Federal Reserve is launching a special fund to keep credit flowing in the short-term commercial paper market that many companies use to raise cash for day-to-day operations. (Commercial paper generally matures in fewer than 270 days.) Starting today the Fed will...
Think the Fed got everyone’s attention with a Sunday night interest rate cut to 0%?
On Sunday night the Federal Reserve announced that it would cut interest rates to 0% (actually a policy range of 0% to 0.25%) from the current 1.00% to 1.25% range. The central bank will also resume its program of quantitative easing by buying at least $700 billion in...
Fed rides to the rescue–and stocks are still down almost 8% at 2:30 p.m. in New York
The Federal Reserve announced this morning that it would inject $1.5 trillion into short-term bank to bank lending markets today and tomorrow. The U.S. central bank will offer $500 billion in a three-month repo operation at 1:30 p.m. and repeat the exercise tomorrow,...
Oops!”Emergency” interest rate cut spurs U.S. stock sell off as Fed creates negative feedback loop
The U.S. Federal Reserve announced an “emergency” 50 basis point cut to its benchmark interest rate. The cut left the Fed benchmark with a range of 1% to 1.25%. The move comes ahead of the Fed’s regular meeting on March 18. The interest rate cut,...
For another day, at least, financial markets continue to believe in central bank fairy dust
Financial markets moved higher on news that finance ministers and central bankers from the Group of Seven economies will hold a teleconference tomorrow, Tuesday, on how to respond to the coronavirus pandemic. The expectation is that central banks in Japan, England,...
For another day the Federal Reserve rallies the market
It was just four sentences–“The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will...
Jim’s Extra!! Next big date in the coronavirus selloff? March 18
Jim’s Extras are something new that I’ve added to JubakPicks.com. Jim’s Extras are posts that provide a wider economic or market analysts than the normal diet here of stock specific posts or posts that cover the day’s market moves. Like...
It’s still a “Central banks to the rescue” mentality in the financial markets
U.S. stocks were up strongly today on news that the central banks of the United States and China were likely to continue to provide cheap–and cheaper–liquidity to financial markets and economies. In minutes of its January 29 Open Market Committee meeting...
Unsustainable debt a danger? But it’s so far away, the markets say
Nobody wants to hear that U.S. government and consumer debt aren’t sustainable. Not President Donald Trump. Not the financial markets. Today, February 11, Federal Reserve Board Chair Jerome Powell told the House Financial Services Committee that it was important...
Here’s why U.S. economy added 225,000 jobs in January, well above projections but U.S. stocks closed down
The U.S. economy added 225,000 jobs in January, well above the average 175,000 jobs added per month in 2019. And still markets fell. The Standard & Poor’s 500 dropped 0.54% and the Dow Jones Industrial Average closed down 0.94%. The NASADAQ Composite...
GDP up at 2.1% rate in 4th quarter but weakness emerges (or continues) in the numbers
The U.S. economy grew at a 2.1% annualized rate in the fourth quarter. That matches the growth rate for the third quarter and is slightly above the 2% growth predicted by economists surveyed by Bloomberg. Full-year GDP growth finished at 2.3% in 2019, the lowest of...
Gold in ETFs nears record; what’s next for the yellow metal?
Gold held by ETFs (exchange-traded funds) hit the highest level in seven years on Tuesday as investors and traders piled into the traditional hedge against uncertainty and stock market volatility. Worldwide gold holdings in ETFs rose to 2,561.2 tons as of Tuesday, the...Jim’s Daily Email Alerts:
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