November 10, 2023 | Daily JAM, Mid Term, Morning Briefing |
My bets on rising volatility have been hammered in the last few days. The December 20 Call Options on the CBOE S&P 500 Volatility Index (VIX) at $280 a contact dropped another 21% today to $121 a contract. The January 17 Call Options at 17 that I bought for $268 closed at $211, down another 16%.The VIX itself ended the day at 14.23, down 7% for the session. It’s sure hard looking at losses like this. But I would remind you that the VIX is very volatile. The volatility index was at 21.71 on October 20. And that the calendar is marked with two big events that could reunite financial market volatility, one courtesy of the House of Representatives and the other courtesy of the Federal Reserve.
November 4, 2023 | Daily JAM |
Nothing this week from new House Speaker Mike Johnson suggests that Congress will act in time to prevent a U.S. government shutdown on November 17.
October 5, 2023 | Daily JAM, Morning Briefing |
Here’s the math that leads me to believe we’re headed to a new show down crisis when the temporary fix that keeps the government open until November 17 runs out.
October 1, 2023 | Daily JAM, Short Term |
Kicking the shutdown 45 days down the road doesn’t change a single vote in Congress. The question remains exactly what it was before Saturday’s vote–Will McCarthy–or whoever is Speaker–use Democratic votes to pass legislation to fund the operations of the Federal government? Anything that increases the chances the Congress will return to its pre-vote chaos–or worse–will be a negative for financial markets. Anything that points to a full fiscal year budget based on a willingness to use Democratic votes in the House to pass a full fiscal year budget will be a positive for financial markets.
September 23, 2023 | Daily JAM, Short Term |
Expect dueling news watches this week. Garnering most of the pixels will be the countdown to a government shutdown if Congress doesn’t pass a stopgap continuing resolution to keep funding the federal government by September 30. Odds are good right now that the House of Representatives won’t meet the deadline and the many government departments will shut down next week. And on Friday, investors get the next release of the Federal Reserve’s favorite inflation series, the Personal Consumption Expenditures index.
September 22, 2023 | Daily JAM, Mid Term, Morning Briefing |
Yeah, you’ve read all the stories about who will get hurt by a government shutdown–folks who need passports, communities in need of disaster aid, childcare centers, air travelers–and I’m sure your full up to your eyeballs with stories about how the Republican majority in in House is so dysfunctional that Speaker Kevin McCarthy couldn’t win a vote to declare water wet. But I’ve got some really good news: because the statisticians who compile the data on GDP, employment trends, producer and consumer prices, and other indicators that track the economy will be furloughed if the government shuts down, we’re not likely to know the full extent of the damage until we’re well into what could be a prolonged shutdown. Of course, it’s not clear that not knowing will be appreciated by financial markets that are already looking a bit anxious.
September 7, 2023 | Daily JAM, Morning Briefing |
Oh, boy, something to look forward to. The Senate returned to session on September 5 and the House will follow on September 12. And a new government shutdown looms. (This is different than the threat of a default on U.S. government debt that was averted by a last-minute deal to raise the debt ceiling. This time the government and agencies such as the Federal Aviation Administration and the Department of Agriculture would simply hang closed signs on their doors until Congress appropirated money for operations.)
The timing has a good likelihod of disrupting a clear trend in the financial markets.
December 1, 2021 | Daily JAM, Morning Briefing |
Congress may simply be out of time as it stares at a Friday deadline for keeping the federal government open. Republicans in the House and Senate seem determined to throw enough sand in the wheels to prevent a vote on funding the government after midnight on Friday.
September 25, 2021 | Daily JAM |
Will this be the week that the markets to wake up to the almost certainty that Congress will not pass a spending authorization bill by September 30? And that the government will shut down?
September 18, 2021 | Daily JAM |
I doubt that, when push comes to shove, Congress will walk away from its responsibilities and allow the Federal government to go into default. But I suspect that Republicans won’t vote to raise the debt ceiling, which would allow the federal government to meet its commitments on spending it has already approved, without another government shutdown. On Friday, Senate minority leader Mitch McConnell declared that Senate Republicans will not vote to increase the Treasury’s authority to continue borrowing.
December 24, 2020 | Daily JAM, Morning Briefing |
Congress dispersed for Christmas. President Donald Trump headed to Florida. And there’s still no telling whether President Trump will, as he’s suggested via Twitter, whether he will veto the huge coronavirus relief/government spending bill.
December 23, 2020 | Daily JAM, Short Term, You Might Have Missed |
On Tuesday President Donald Trump tweeted a video heavily criticizing the recently passed coronavirus stimulus/relief bill–and a huge funding bill to keep the government running–and implying that he could veto the bill. Today, Wednesday, December 23, stocks barely budged. The Standard & Poor’s 500 was up 0.07%. The Dow Jones Industrial Average gained 0.38%. The NASDAQ Composite was down 0.29% and the NASDAQ 100 fell 0.51%. The small cap Russell 2000 picked up 0.87%. The iShares MSCI Emerging Markets ETF rose 1.02%. Why the lack of reaction?