Morning Briefing
April 7, 2021 | Daily JAM, Mid Term, Morning Briefing |
Nothing to see here. Move along. In the minutes from its March 16-17 meeting, released today April 7, Federal Reserve officials told the financial markets “that it would likely be some time until substantial further progress toward the [Open Market] Committee’s maximum-employment and price-stability goals would be realized.” And, the minutes went on, “a number of participants highlighted the importance of the Committee clearly communicating its assessment of progress toward its longer-run goals well in advance of the time when it could be judged substantial enough to warrant a change in the pace of asset purchases.”
April 6, 2021 | Daily JAM, Morning Briefing, Short Term |
A significant number of bond traders are betting that the calm in bond markets won’t last. Short interest in the $14 billion iShares 20+ Year Treasury Bond ETF (TLT) has climbed to about one-fifth of shares outstanding, the highest since early 2017, according to IHS Markit. Bearish bets, Bloomberg reports, have risen from just 7% at the start of 2021.
April 5, 2021 | Daily JAM, Morning Briefing |
Stocks are up strongly this morning (April 5) on delayed buying after Friday’s huge jobs gains for March (the stock market was closed for Good Friday) and on very good news from the service sector of the U.S. economy in the March survey from the Institute for Supply Management.
The ISM’s non-manufacturing activity index rebounded to 63.7 in March. That’s the higher level in the survey’s history and comes after a reading of 55.3 in February.
April 2, 2021 | Daily JAM, Morning Briefing |
In March the U.S. economy added the most jobs since August, the Labor Department reported this morning. Payrolls increased by 916,000 jobs in the month. (And the Feburary numbers were revised upwards to show a gain of 468,000 jobs.) The combination was enough to send the official unemployment rate to 6.0% from 6.2% in February.
April 1, 2021 | Daily JAM, Morning Briefing |
The number of workers filing new claims for unemployment unexpectedly jumped for the week ended March 27. The rise to 719,000 initial claims for unemployment was a surprise after last week when the total dropped to a revised 658,000. That was the lost weekly total since the pandemic shutdowns started in March 2020.
March 31, 2021 | Daily JAM, Morning Briefing |
The one certainty in the stock market right now, I’d say, is volatility. Both to the upside and to the downside. So I think we should take what the market is giving us. Using these three moves in the short term.
March 30, 2021 | Daily JAM, Morning Briefing |
You can judge the stock market’s mood pretty accurately today, Tuesday, March 30, from just a few price movements. Take a look at the performance of bank stocks, the small cap Russell 2000, the CBOE VIX “fear index,” and technology stocks to see where we’re likely to be headed for the rest of this week.
March 28, 2021 | Daily JAM, Morning Briefing |
All eyes will be on Friday’s report on March jobs from the Bureau of Labor Statistics. Economists surveyed by Bloomberg project that the economy will add 642,000 new jobs in the month and that the official unemployment rate will drop to 6.0% from 6.2% in February. That would keep the economy on track to hit a 4.9% official unemployment rate by the end of 2021 as per the Federal Reserve’s most recent economic update. That would still be above the 3.5% unemployment rate for 2019, before the pandemic gut-punched the U.S. and global economies. That rate was the lowest official unemployment annual rate since 1969. And a drop to 6.0% unemployment would be a strong sign that the U.S. economy is on the mend.
March 26, 2021 | Daily JAM, Morning Briefing |
The Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditures (PCE) Price Index fell 0.2% month to month in February from January. That was below economist expectations of a 0.5% month to month gain. On a year over year basis, the headline PCE Price Index climbed 1.6%, according to the U.S. Bureau of Economic Analysis. That was in line with economists’s projections.
March 25, 2021 | Daily JAM, Morning Briefing |
This morning, March 25, the Labor Department reported that new claims for unemployment in regular state programs fell to 684,000 last week. Economists surveyed by Dow Jones had expected 735,000 new claims. In the previous week workers filed 781,000 new claims. This is good news. The drop of 97,000 is another sign that the U.S. economy is marching into a post-vaccine recovery. (We’ve still got a long, long way to go: The total number of claims for all types of unemployment benefits was 18.95 million for the week ended March 6.) So shouldn’t stocks have moved up more strongly, especially after yesterday’s sell off?
March 24, 2021 | Daily JAM, Morning Briefing |
What looked like one of the rotation markets we’ve seen recently with selling of technology shares and buying of cyclicals and post-vaccine recovery stocks turned into a market-wide sell off by the close.
March 23, 2021 | Daily JAM, Morning Briefing |
This morning Federal Reserve Chair Jerome Powell gave reassuring inflation testimony before the House Financial Services Committee. Prices would rise this year as Americans are able to go out and spend post-pandemic, but while “We do expect that inflation will move up over the course of this year,” he said. “Our best view is that the effect on inflation will be neither particularly large nor persistent.” As you might expect on that view, the yield on the 10-year U.S. Treasury dropped 5 basis points to 1.64% as of 2 p.m. New York time on Tuesday, March 23. On most days recently a drop in Treasury yields like that would have produced a significant rally in stocks. But not today.
