Dollar climbs on Trump speech; markets bet on more U.S. growth and sooner rather than later interest rate increase
Today, March 1, the Bloomberg Dollar Spot Index jumped 0.4%. That was a fourth straight daily gain and let the dollar close in on its highest level since January 27. With the dollar climbing, the yen fell 0.8% and the euro dropped 0.3% to $1.055. Yields on the 10-year...
On Friday the Fed will make it clear what it thought of tonight’s speech by President Trump
President Donald Trump speaks tonight to a joint session of Congress. The expectation is that he will present–in general terms–a budget with a big increase for military spending and cuts to programs at departments such as the Environmental Protection...
In minutes released today Fed says “Fairly soon” but probably not March for next interest rate increase
The Federal Reserve’s minutes from its January 31 to February 1 meeting show the odds still slightly tilted to waiting a bit longer before raising interest rates. The worries that are pushing the Fed toward some delay include uncertainty over the effects of a...Inflation continues to climb, CPI says
Inflation, as measured by the Consumer Price Index, Â rose in January by a larger than forecast 0.6%. Â That’s a pickup from the 0.3% rise in December and brings the 12-month inflation rate to 2.5%, the highest since March 2012. The core CPI, which excludes...Goldilocks returns with January jobs report
The January jobs report showing a net gain of 227,000 jobs (versus the consensus of 170,000 among economists surveyed by Briefing.com) would have been enough to send stock and Treasury bond prices down and the dollar up because the very strong job creation in January...
European Central Bank stands pat; Draghi urges Germany to have patience
If it sounds a little simplistic to you as monetary policy, that may be because it is. Confronted with German criticism of the asset buying stimulus program at the European Central Bank and German fears of resurgent inflation, bank president Mario Draghi advised...
Inflation creeps higher leaving Fed on track to raise interest rates in June
Granted the Consumer Price Index isn’t the inflation index that the Federal Reserve prefers but until the next release of that measure–the Personal Consumption Expenditures Price Index scheduled for January 30–the CPI is what we’ve got. In...
Sell CMI: After a 55% gain in 2016 Cummins no longer yields enough to stay in my Dividend portfolio
After a 55.3% gain in 2016, shares of Cummins (CMI) no longer pay enough to remain in my Dividend portfolio. The huge appreciation of 2016 means the stock now yields just 2.98% and in this portfolio I look for yields of 4% or more. (With 5% as the ideal–but hey...
My Dividend Portfolio returned 26.79% in 2016
If you had bought the stocks in my Dividend Portfolio on December 31, 2015–or when I added them to this portfolio during 2016 in the cases of Coach (COH), Qualcomm (QCOM), VanEck Vectors Preferred Securities (excluding Financials) ETF (PFXF), and Kinder Morgan...
China’s inflation rate at the factory level surges to 5.5% annual pace in December
Sort of OK news and bad news on inflation out of China over night. The Consumer Price Index rose by just 2.1% year-over-year in December. Economists had been looking for inflation to increase by 2.2%. A slower than expected increase in the price of vegetables, a key...
My forecast of the big events and macro trends for the year ahead: The 12 most dangerous months of 2017
I’ve got good news for all those who didn’t find 2016 volatile enough. Yep, 2017 looks likely to top 2016 for volatility. Hard to imagine, perhaps. Even though the CBOE S&P 500 Volatility Index (VIX) spent much of the year near multi-year lows, because...
Very preliminary evidence shows higher interest rates slowing U.S. economy
The data actually make sense when you consider the time lags and what these surveys measure. Contracts to purchase previously owned U.S. homes fell in November, unexpectedly, according to the National Association of Realtors in Washington. Pending home sales declined...
Mixed fallout from higher revision to U.S. GDP growth
The news that U.S. economic growth in the third quarter had been revised upward to 3.5% from an earlier 3.2% has been a mixed blessing for the financial markets. Higher growth has helped stocks resume their post-election rally. But it hasn’t helped the bond...
New home sales tomorrow are early test of Fed’s increase in interest rates
Tomorrow, Friday december 23, we get news on new home sales in November. Coming after some market weakness this week and before the long Christmas holiday (financial markets are closed on Monday, December 26), this report has the power to set the tone for a few days....
Will it be two or three interest rate increases in 2017?
At its December 14 meeting, the Federal Reserve signaled that it was thinking about three more interest rate increases in 2017 instead of two. (The Fed raised interest rates by 25 basis points on December 14. That was the Fed’s first interest rate increase in...
Whoa, Nellie! Fed raises rates today and signals more increases than expected in 2017
As expected, the Federal Reserve raised interest rates for the first time this year today. Unexpectedly, the Fed’s dot plot shows that Fed members now see three additional interest rate increases in 2017 instead of the two the financial markets had expected...
Last obstacle falls to Fed interest rate increase on December 14–November jobs number almost meets expectations
Good enough for government work. The U.S. economy added 178,000 jobs in November, the Labor Department announced today. That was up from a revised net add of 142,000 jobs in October but below the 180,000 expected by economists surveyed by Bloomberg. Official...
U.S. economy shows 3.2% growth in third quarter ahead of Fed meeting on interest rates
The second revision to U.S. GDP growth in the third quarter was the charm. The U.S. economy grew at a 3.2% annualized rate in the the three months that ended in September, according to the Commerce Department. That was ahead of the 2.9% growth reported in the initial...
Global rout in bonds continues–new danger spot Japan
The rout in global bonds continued today. The yield on the 10-year U.S. Treasury climbed 7 basis points to 2.22% as of 3 p.m. New York time. That’s the highest level since January and comes after a jump of 37 basis points last week. Yields on the 10-year German...
Global bond markets decide Trump means more government spending, a big tax cut, bigger deficits, and higher inflation–and increased odds that the Fed will raise interest rates faster than expected just last week
Global bond markets fell to the tune of a more than $1 trillion loss this week after Donald Trump’s win in the U.S. presidential election. The market value of the Bank of America’s Global Broad Market Index, which tracks 24,000 bonds around the world, fell...
A new landscape for investors after a Trump victory–my guide from A-W (I can’t find an X,Y, or Z)
And to think that just yesterday I was scouting for an investment that would let me go long the Mexican peso and thinking of cutting back my exposure to biotechs. Not today. My thinking on both those potential investments has been turned upside down by Donald’s...
Economy adds 161,000 jobs in October; September revised up to 191,000; Fed on track to December rate increase
The U.S. economy added 161,000 jobs in October and the Bureau of Labor Statistics revised the September job total upwards to 191,000. The original September report put the month’s job gains at 156,000. Economists surveyed by Bloomberg were expecting the economy...
Fed holds rates steady but says case for December move stronger
Odds for a December interest rate increase by the Federal Reserve climbed to 78% today after the U.S. central bank held short-term rates steady at 0.25%-0.50% at its Wednesday meeting, but said that “the case for an increase in the federal funds rate has continued to...
Advance warning: New York markets are going to have a lot to digest when they open Friday morning
Earnings reports from Amazon (AMZN) and Alphabet (GOOG) after the close today. Earnings from ExxonMobil(XOM) before the open tomorrow. The advance report on third quarter U.S. GDP at 8:30 a.m. New York time tomorrow. Yep, the financial markets in New York are going to...
3 moves for a vulnerable market
If this market is vulnerable, what should I do? I’ve been asked that question repeatedly since I first called this market vulnerable back in my October 11 post “Suddenly U.S. stocks seem vulnerable.” To answer that–the what should I do...
Mild inflation numbers lead to mild market gains
The headline consumer price index, the government announced this morning, rose 0.3% in September. That follows on a 0.2% increase in August. The headline rate of inflation is now 1.5% year over year. That’s the highest rate of inflation for this number since...
U.S. markets decide not to go anywhere ahead of the weekend
U.S. stocks stabilized today–thanks to better than expected earnings from Citigroup (C) and JPMorgan Chase (JPM) and, well, Friday. The Standard & Poor’s 500 stock index closed up 0.02%. U.S. crude oil benchmark West Texas Intermediate fell 0.24% but...
This “vulnerable” market looks to be shifting to a risk off stance
On the surface and if you look only at the market wide indexes, nothing much happened today. The Standard & Poor’s 500 stock index, for example, finished just 0.31% lower–that’s 6.63 points–to 2132.55. But look at which assets and sectors...
Suddenly U.S. stocks seem vulnerable
It’s not like U.S. stocks didn’t have enough to worry about today. The bond market priced in the highest level of inflation expectations since May. Oil fell as Russia’s biggest producer Rosneft said it won’t cut output. Alcoa (AA), the company...Jim’s Daily Email Alerts:
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