The financial markets–and especially Treasuries–continue their September trend reversal
One way to understand of the recent market action–one way that makes sense to me–is to think of it as a big short squeeze. The drop in Treasury yields and the climb in Treasury prices went to far in August with Treasuries showing their biggest monthly gain...
With luck and slight of hand, Draghi restarts quantitative easing at European Central Bank
If it had come to a formal vote, there’s a good chance that European Central Bank President Mario Draghi would have faced defeat in his efforts to revive quantitative easing at the central bank. But the bank doesn’t usually hold a formal vote on a issue...
Flood of corporate debt sends Treasuries prices tumbling
Companies are set to borrow $74 billion in the investment-grade bond market this week. That’s the most for a week since records began in 1972. The issuers include Coca-Cola (KO), Walt Disney (DIS), and Apple (AAPL). At least another $50 billion in corporate bond...
The market wants to believe today–rallying ahead of the Fed?
As of 2 p.m. New York time U.S. stocks were higher on just about no meaningful news. To me it looks like the market wants to climb in the very near term–testing technical momentum to move to 2950 on the Standard & Poor’s 500 and maybe beyond. The...No consensus at the Fed in July for faster interest rate cuts, minutes show
The financial market didn’t get what it had hoped for out of today’s release of the minutes from the Federal Reserve’s July 31 meeting. The market was hoping for something in the minutes that pointed toward a shift in Fed policy toward an extended...
Markets bet that Fed will follow ECB this week to announce something “spectacular”
Gotta love that financial market enthusiasm for central banks. Last week the markets rallied on signals from the European Central Bank that it would cut its key interest rate–now at a negative 0.40%–to a negative -0.50%, lower the rates that banks pay to...
No let up in President Trump’s pressure on the Fed to cut interest rates faster
More tweets today from President Donald Trump in his campaign to pressure the Federal Reserve into more aggressive cuts to interest rates. “Incompetence is a terrible thing to watch, especially when things could be taken care of sooo easily. We will WIN anyway,” the...
Portfolio strategies for a changing market: What went up today when everything went down
For the last few weeks I’ve been working to shift gears in my online portfolios in anticipation of a tougher market after the Federal Reserve meeting (and a likely additional interest rate cut) on September 18. I’ve added Treasury ETFs–the Vanguard...
Financial markets fear what comes next in U.S.-China trade war
It would be unwise to assume that today’s retaliation by China is the last tit for tat in the U.S.-China war. What “reasonable” fears are making rounds today? That the Chinese decision to let the yuan break the 7-yuan-to-the-dollar barrier...
Decent job growth in July; bond market prices in 100% chance of another interest rate cut on September 18
The U.S. economy added 164,000 jobs in July. That’s down from the 193,000 jobs added in June (revised down from an initial 224,000) and slightly higher than the 160,000 jobs forecast by economists surveyed by Briefing.com. At 3.7% the headline unemployment rate...
Trump’s new round of China tariffs freaks out financial–especially bond–markets
So much for any hopes that the resumption of U.S-China trade talks would put an end to the tariff war in anything like the near term. The new round of talks only began on Wednesday, was adjourned after a day, and was scheduled to resume in Washington in September....
Treasury says debt sales to remain at record levels for rest of 2019
Can you connect the dots? No one in Washington seems to be willing to make the effort. On a day when the Federal Reserve said it would cut its benchmark interest rate by 25 basis points and end its efforts to sell some of the bonds in its own portfolio two months...
Fed cuts interest rates by 25 basis points; financial markets want more, more, more
Today the Federal Reserve’s Open Market Committee cut the Fed’s benchmark interest rate by 25 basis points. That’s pretty much what the financial markets had been expecting–although a sizable minority of investors and traders had been hoping...
The market dangers of this incompetent Federal Reserve
Add Thursday’s remarks by New York Fed President John Williams to those of Fed chair Jerome Powell back in December and the record shows this team at the Fed is the “Gang that Couldn’t Talk Straight.” In December Powell sent the markets...
Using softness to add more Treasury exposure to Volatility Portfolio–maybe you should be adding Treasuries too
Treasury prices have been a little weak over the last two weeks. As a consequence the Vanguard Intermediate Term Treasury ETF (VGIT) and the Vanguard Short Term Treasury ETF (VGSH), for example, have dropped from highs on June 25 of $66.03 and $60.94, respectively, to...In the longer short term does the market’s intense focus on interest rate cuts from the Fed set up a trap for stocks?
Looking at what I called “the shortish short term” in a post yesterday, I said that in that time frame the market is likely to behave as if nothing much matters besides the Federal Reserve and interest rate cuts. The logic, I argued, works like this:...
Powell sounds even more dovish on interest rates but market shrugs
In the second day of his semi-annual testimony to Congress–this time in front of the Senate–Federal Reserve chairman Jerome Powell sounded even more likely to support an interest rate cut at the central bank’s July meeting. The Fed has room to cut...
In the shortish short term does anything matter for U.S. financial markets except for the Fed?
Think about it this way: The bulk of investors and traders believe that the Federal Reserve will cut interest rates at both the July 31 and September 18 central bank meetings. A significant minority believes that the Fed will deliver more than just two 25 basis point...
July interest rate cut from Fed looks like done deal after Powell testimony
Federal Reserve chair Jerome Powell had an opportunity this morning to talk down the odds of an interest rate cut at the central bank’s July 31 meeting in testimony in front of the House Financial Services Committee. He didn’t–and I think that makes...
Will the Fed try to talk down expectations for interest rate cuts this week? I don’t think so but…
Every word the Federal Reserve speaks this week and next will get examined in excruciating detail because with the Fed’s quiet period due to start on July 20, the central bank has less than two weeks to talk financial markets up or down ahead of the July 31...
Head of Cleveland Fed argues against July interest rate cut–markets shrugs off her comments
In a speech today, July 2, in London Loretta Mester, president of the Cleveland Federal Reserve Bank, argued against an interest rate cut at the central bank’s July 31 meeting. “Cutting rates at this juncture could reinforce negative sentiment about a...
Is that inflation we see?
The core Personal Consumption Expenditures Index, the Federal Reserve’s preferred measure of inflation, picked up in May by 0.2% from April. That took the annual inflation rate to 1.6%. That was just above the median estimate from economists surveyed by Bloomberg and...
How low can 10-year Treasury yields go? How about another 25 basis points
Today with the yield on the 10-year Treasury down to 2.02%, a drop of 2 basis points, two Wall Street heavy weights are predicting that we haven’t seen a bottom in yield yet. Not by a long shot. Goldman Sachs today cut its forecast for the year-end yield on the...
Whoa! on those interest rate cuts, the Fed says
The financial markets are getting ahead of themselves in a bad case of rate cut fever, Fed chair Jerome Powell, and St. Louis Fed President James Bullard both said today. This is a message that I’ve been waiting to hear as the financial markets moved to price in...
Adding Vanguard Short Term Treasury ETF to my Picks Portfolio
Last night I made Vanguard Short Term Treasury ETF (VGSH) the No. 2 pick in my Special Report 10 Best Picks for the Next 6 Months of 2019 on my JubakAM.com subscription site. Today I’m adding it to my Jubak Picks Portfolio on all my sites. I’m calling this...
Federal Reserve rhetoric moves strongly toward interest rate cut
So much for “patient.” Today after the meeting of the Open Market Committee on interest rates the Federal Reserve announced that it would leave benchmark interest rates at the current 2.25% to 2.50%. But in its words the Fed delivered what the market hoped...
Bond traders test the Powell Put today
U.S. stocks dropped again today with the Standard & Poor’s 500 index closed down another 0.69% to 2783.03. U.S. Treasury bonds rallied with the price of the 10-yer bond up enough to push the yield down to 2.21% for a drop in yield of 26 basis points in the...
Federal Reserve minutes say, No interest rate move “for some time”
Minutes from the Federal Reserve’s April 30-May 1 meeting showed officials at the U.S. central bank inclined toward patience and to keeping the current wait-and-see policy in place “for some time.” Adding to the dovish tone of the minutes, many Fed...
No surprises in the Fed’s minutes released today but “significant uncertainties”
According to the minutes of the Federal Reserve’s March meeting, released this afternoon, everything is on the table. Here’s a quote that sums up the thrust of the minutes, in my opinion.“Several participants noted that their views of the appropriate...Jim’s Daily Email Alerts:
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