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 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, 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, Morning Briefing, Short Term |
With the U.S. financial markets closed for Presidents’ Day and with markets in China and Hong Kong still closed for the Lunar New Year, it’s a slow news day for stocks and bonds today. But get ready for the action to resume on Tuesday with much of the attention focused on the U.S. Treasury market.
February 16, 2018 | Daily JAM, Long Term, Volatility |
Before this market rout and from the safety of the World Economic Forum in Davos, hedge fund legend Ray Dalio talked about the coming bear market in bonds and likelihood that we were near the end of this cycle of economic boom. Sometime in the next two years, he remarked, we were likely to experience a recession and that would put an end to one of the longest periods of economic growth in the United States. With the experience of the big market rout of January 26 through February 8 behind us–if it indeed is–when the Standard & Poor 500 stock index fell 9.03%, I’d like to make Dalio’s comments a little more explicit and apply them more directly to the stock market.
February 16, 2018 | Daily JAM, Mid Term, Morning Briefing |
As of yesterday the Standard & Poor’s 500 stock index has 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 question of what lies ahead–A rapid climb back through the old high of 2872.87 to new records (a classic V-recovery) or a move back to near the old high, followed by a failure at that level and a deeper correction of, say, 15%?
February 14, 2018 | Daily JAM, Mid Term, Morning Briefing |
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. Core CPI, which excludes more volatile food and energy prices, climbed 0.3% in January. Economists surveyed by Briefing.com had expected a 0.2% increase.
February 13, 2018 | Daily JAM, Mid Term, Morning Briefing |
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 Treasury finished at 2.85% yesterday after trading as high as 2.89%, a four-year high.
February 9, 2018 | Uncategorized, You Might Have Missed |
Once upon a time, before the U.S. stock market moved into an actual correction and before bond yields spiked, the Federal Reserve was clearly on track to raise short-term interest rates at its March 21 meeting. The debate in the financial markets was about whether the Fed would increase its benchmark interest rate three or four times in 2018. But then we got tax cuts piled on top of spending increases.
February 9, 2018 | Daily JAM, Mid Term, Morning Briefing |
Notice that the signing of a bill early this morning to keep the government open and to fund operations for two years hasn’t resulted in a serious rally in either stocks or bonds. And mind you, this deal also “solves” the debt ceiling crisis by suspending the debt ceiling until March 2019. That passes for statesman-like foresight in Washington these days and this certainly counts as good news. So why no big upside move on these events?
February 8, 2018 | Daily JAM, Short Term |
Here we go again. After a pause that raised hopes that the slide in U.S. stocks was over, today the sell off has resumed. As of 3:30 p.m. New York time, the S&P 500 stock index was down 2.59%, or 60.3 points, to 2612.
February 8, 2018 | Daily JAM, Morning Briefing |
The Senate is set to vote later today on a deal that would fund the government for two years and add $500 billion in new spending to a deficit already pegged at north of $1 trillion
