The pace of the week just picks up from here
Today was supposed to ease us into a week with just too much big macro potentially market-moving news. So much for easing. Thanks, Facebook. Weeks like this don’t come around often, thank goodness, but when they do, Whew! Monday eases investors and traders in...
What’s behind this morning’s drop? Not what the talking heads are claiming
As of 11:30 a.m. New York time this morning, the Standard & Poor’s 500 Stock index was down 1.15%. The Dow Jones Industrial Average was off 1.02%. And the technology heavy NASDAQ was lower by 1.84%. Much of the talk this morning has centered on news from...
Treasury market survives this week’s first test
The U.S. Treasury sold $28 billion of three-year Treasury notes and $21 billion of 10-year notes today–and the price of the 10-year note actually climbed, taking the yield down to 2.87%, three basis points lower than Friday’s 2.90% yield. This was a good...
Fed Beige Book inflation take raises odds for March 21 interest rate increase
The Federal Reserve’s Beige Book economic report, based on anecdotal information collected by the 12 regional Federal Reserve banks, shows that a tight U.S. labor market is generating wage increases in most of the country and is leading to “moderate...
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...
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...
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...
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...
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...
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,...
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....
Good jobs report turns into bad news for bonds and stocks this morning
The U.S. economy added 200,000 jobs in January, the Bureau of Labor Statistics reported this morning. Economists surveyed by Briefing.com had expected 180,000 net new jobs. The official unemployment rate remained at 4.1%. The U-6 total unemployment rate, which...
Fed signals “maybe”on four interest rate hikes in 2018 but stocks stabilize anyway after yesterday’s drop
As expected the Federal Reserve left interest rates unchanged at today’s meeting of the Open Market Committee. But in its post-meeting statement, the last in the chair for Janet Yellen, the central bank added language that points toward a slightly more...
Two-year Treasury yield back to 2%, rate not seen since global financial crisis
Some mornings I have to dig for a lead new story. Other days I’ve got candidates crawling out of the woodwork like roaches in a dirty kitchen when the lights are off. Today I’ve got lots and lots of choices. I’m gong to begin with the bond market...
Are bond yields finally climbing (and bond prices falling) in a belated response to a global shift in central bank policies?
The yield on the 10-year U.S. Treasury climbed 7 basis points today to 2.55%. That’s the highest yield since March. That prompted bond guru Bill Gross to declare that we have entered a confirmed bear market in bonds with the upward trend lines for bond prices of...
December jobs report delivers mild disappointment
The U.S. economy added 148,000 net new jobs in December. Economists surveyed by Bloomberg had expected growth of 190,000 jobs. The Bureau of Labor Statistics also revised the November job growth to 252,000 from an initial 228,000. The official unemployment rate...
Federal Reserve minutes from December released today were last squawk from the inflation doves
If you try to interpret the minutes released today from the Federal Reserve’s December 12-13 meeting without factoring in the departure of key players at the central bank, I think you’ll get the meaning of that meeting exactly wrong. On the surface, the...
The Federal Reserve raises interest rates as expected–but the dot plot has a surprise or two
No surprise: The Federal Reserve raised its short-term benchmark Fed Funds rate by 25 basis points to a range of 1.25% to 1.50% at today’s meeting of the Open Market Committee. No surprise: The Fed and its outgoing chair Janet Yellen didn’t say anything...
Jobs number strong but income growth disappoints
The U.S. economy added a net 228,000 jobs in November, the Labor Department reported this morning. Economists surveyed by Bloomberg were looking for a gain of 195,000. That kept the unemployment rate at 4.1%, the lowest since 2000. Disappointingly, however, average...
First sign of dissent from the consensus view of “Two and done” for interest rates in 2018?
Goldman Sachs released its seven top trade themes for 2018 yesterday, November 17. Investors and traders always receive Goldman’s trading ideas with a high degree of skepticism, knowing that the bank’s traders are perfectly comfortable trading against the...
Powell to replace Yellen at helm of Federal Reserve: Here’s how it might make a difference
This afternoon President Donald Trump nominated Federal Reserve governor Jerome Powell (known as Jay) to replace Janet Yellen as head of the Federal Reserve. Powell, a extremely wealthy Republican, was initially appointed to the central bank’s board of governors...
Slightly lower than expected inflation reported this morning hasn’t (so far) dented expectations for December 13 Fed interest rate increase
For August the Personal Consumption Expenditures Price Index, the Federal Reserve’s preferred inflation measure, showed an increase in core inflation of just 0.1%. Economists surveyed by Briefing.com had projected an increase of 0.2% for the month. Year over...
Odds of a December interest rate increase soaring
The financial markets are taking Janet Yellen seriously. In a speech yesterday the Fed chair strongly supported an interest rate increase at the Federal Reserve’s December 13 meeting. Coming along with comments from other Fed governors, the markets have decided...
No surprises from the Fed–for 2017 anyway
At today’s meeting of the Federal Reserve’s Open Market committee, the central bank kept its benchmark short-term interest rate unchanged at 1% to 1.25%, and announced that it would implement its plan to shrink its $4.5 trillion balance sheet by $10...
All eyes on the Fed’s Dot Plot after Wednesday’s meeting
The Dot Plot is a feature of every quarterly meeting of the Federal Reserve. It tracks changes in the consensus (and range) of opinion at the Fed on core macro economic issues such as inflation and interest rates. And, most importantly, it tracks changes in opinion at...
Odds of a Fed interest rate increase move up–for December
Yesterday’s report of a slight uptick in inflation has pushed odds higher for a December interest rate increase from the Federal Reserve. The report, however, had no effect on odds in the Fed Funds Futures market for an increase at the Fed’s September 20...
Yellen tells Trump exactly what he’ll get if he reappoints her to head the Federal Reserve
If President Donald Trump reappoints current Federal Reserve chair Janet Yellen to a new term in February 2018, no one will be able to say truthfully that he didn’t know exactly what kind of chair he would be getting. Not after her speech today at the Kansas...
Market sinks; volatility climbs on strong economic news, D.C. chaos
The Standard & Poor’s 500 stock index closed down 1.54% today and the NASDAQ Composite fell 1.94%. Gold picked up 0.87%. The CBOE S&P 500 Volatility Index (VIX) broke above 15 again, soaring 31.94% on the day. There was just too much for the markets to...Jim’s Daily Email Alerts:
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