February 24, 2018 | Uncategorized |
A market with an obsessive interest in inflation will get plenty to obsess about this week. On Monday, February 26, Randal Quarles, the new vice-chair for regulatory supervision at the Fed, delivers a speech titled An Assessment of the U.S. Economy at the 34th Annual National Association for Business Economics conference. On Tuesday morning, new Fed chair Jerome H. Powell delivers the Fed’s Semiannual Monetary Policy Report to the Congress to the House Financial Services Committee. And on Friday government statisticians deliver the PCE data on inflation
February 23, 2018 | Daily JAM |
If you’re trying to predict how tight the labor market is–and from that how fast wages and inflation and interest rates–might rise–there’s nothing more important than the puzzle that is workforce participation. The percentage of the potential workforce that is actually working has been stuck at historic lows. And despite the economic recovery participation rates haven’t climbed significantly. If fewer workers who could work are working, then wages are likely to be under more rather than less upward pressure. And now a new report from the Federal Reserve Bank of Kansas City says that men in their prime working years have left the labor force at an astonishing rate and they may never return unless the nature of the U.S. job market changes radically.
February 23, 2018 | Daily JAM, Morning Briefing, Short Term |
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 clear that the bank sees the labor market at or beyond full employment. On the other hand, Wall Street strategists keep saying, It’s different this time.
February 22, 2018 | Notes You Need |
In my daily trawling through the market I come upon lots of tidbits of knowledge that I think are important to investors but that don’t justify a full post. I’ve decided to start compiling these notes here each day in a kind of running mini blog that I’m calling Notes You Need. A typical post resembles this one from today: “1:40 p.m.: Amazon (AMZN) has launched its own Basic Care line of more than 60 over-the-counter health products. The products are produced by Perrigo )PRGO), a private-label healthcare manufacturer, for Amazon. Perrigo reports earnings on February 27. “
February 22, 2018 | Daily JAM, Short Term |
This morning’s report of a 7,000 drop in initial claims for unemployment to 220,000 for the week ended February 17 raises the odds of another strong jobs report when the data for February are published on Friday, March 9.Â
February 21, 2018 | Daily JAM, Morning Briefing, Volatility, You Might Have Missed |
Yesterday, U.S. stocks moved higher in the morning and then continued upward until traders and investors had a chance to think twice about the minutes from the Federal Reserve’s January 30-31 meeting.
February 21, 2018 | Daily JAM, Short Term |
Today’s release of the minutes from the Federal Reserve’s January 30-31 meeting show the central bank estimate economic growth at 2.5% for 2018 and noting that the outlook for stronger economic growth raised the likelihood for continued, gradual interest rate increases. Fed members felt that it was increasingly probable that the economy would hit its inflation target of 2%.
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February 21, 2018 | Daily JAM, Morning Briefing |
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 points on the day,
February 20, 2018 | Daily JAM, Volatility, You Might Have Missed |
The market has finally (and probably only momentarily) stabilized enough for me to rebalance my Volatility Portfolio. My intention was to rebalance at the end of January but then stuff happened. You know 9% drop in the Standard & Poor’s 500, Â huge spike in volatility (as measured by the CBOE S&P Volatility Index (VIX) anyway), correlations shifting all over the place. But after the portfolio’s 53% gain in 2017 and with the changes in the market’s risk profile that are emerging, this portfolio badly needs a rebalance. And here it is. The portfolio is going into this rebalancing with 12 positions. It’s going to come out with 12 positions, although not the same 12 positions and not with the same weights for each position.
February 20, 2018 | Daily JAM, Morning Briefing |
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.
February 19, 2018 | Daily JAM |
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 and with oil at $60 a barrel, the Saudis are pushing for further production cuts and a target price of $70 a barrel.
February 19, 2018 | Daily JAM, MGM, Stock Alerts |
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 volatility and...