November 15, 2024 | Daily JAM, Videos |
Today’s video is Fed One and Done in December? On November 13, the CPI inflation numbers showed inflation ticking up slightly, but the market still believes the Fed will cut rates again in December. On November 13, the CME Fedwatch tool had it at 83% odds we’ll get a cut and I think it’s almost certain. However, when the Dot Plot forecast of GDP, inflation, and interest rates is released in December, I think we’ll see much more uncertainty for the future and likely a planned pause. The three major factors poised to affect the economy are a substantial tax cut, high tariffs and the possibility of mass deportations promised by the president-elect. While two of those items may cancel each other out–with tax cuts being massively stimulative and tariffs cutting into growth by 1.5-2 percentage points while raising costs for consumers, the question of deportations remains. Mass deportations could result in a huge labor shortage and disruptions to supply chains, leading to higher prices. The economy will be under a lot of inflationary pressure from these potential policies and it’s likely the Fed will announce a pause until they see how this all shakes out.
November 14, 2024 | Daily JAM, Morning Briefing |
I think we can expect another huge tax cut package to extend the tax cuts from 2017, and a set of tariffs on China, the European Union, and other trading partners with duties of somewhere between 20% and 200%, and an effort to deport 11 million illegal immigrants (and maybe a few legal immigrants too) And in the face of that policy mix I don’t think there’s any way for the Federal Reserve to reach its goals of getting inflation down to 2%, of lowering interest rates from levels left from the pandemic emergency, and of keeping the economy strong enough to prevent unemployment from climbing. Can’t be done. The Fed doesn’t even begin to have the tools to tackle all those challenges at once. And there’s a non-zero and statistically significant chance of a really serious mistake that would take a big bite out of the economy and the prices of financial assets. Can I tell you why I believe this?
November 13, 2024 | Daily JAM, Morning Briefing |
Inflation ticked up slightly on an annual basis in October, the latest evidence that further reductions in inflation are getting hard to achieve. The Consumer Price Index climbed 2.6% from a year earlier, up from September’s 2.4% annual rate, the Bureau of Labor Statistics reported today. Core inflation, which strips out more volatile food and energy prices, held steady at 3.3% annual rate.
November 11, 2024 | Daily JAM, Morning Briefing |
With financial markets deeply conflicted about the effects of a Trump Administration’s policies on taxes, the deficit, mass deportations, and sky-high tariffs will have on the economy and interest rates the October Consumer Price Index (CPI) due Wednesday takes on added importance. Wall Street economists expect headline inflation rose 2.6% annually in October, an increase from the 2.4% rise in September. Core inflation, which strips out more volatile food and energy prices, is forecast to have climbed at a 3.3% rate year over year. That would be unchanged from September’s increase.
November 6, 2024 | COP, CVS, Daily JAM, LLY, Special Reports, UNG |
When I posted the previous version of this Special Report back on September 30, I wrote: “I don’t know which candidate will win the election. Right now the polls are within the margin of error on the national level–and even tighter in the seven battleground states that will likely decide the election. But I do know the results on November 5 will move stocks. Some right off the bat even before the results are certified. And more significantly as a new administration clarifies its policy views and takes office.” That has changed just a bit with last night’s victory by Donald Trump. We do know who won and will be the President come January 20. And we do know whose policies will move stocks and the financial markets in general. So let’s see if I can bring my picks and strategic advice up to date.
October 31, 2024 | Daily JAM, Morning Briefing, Short Term |
The Federal Reserve’s preferred measure of U.S. inflation, the Personal Consumption Expenditures (PCE) price index, fell to a 2.1% annual rate in September.
October 7, 2024 | Daily JAM, Morning Briefing |
It’s back! Fear that the economy is so strong that the Federal Reserve won’t cut interest rates as sharply or as quickly as expected. In the last few days, following on a surprisingly strong September jobs report, the market has gone from giving 50/50 odds to a second large 50 basis point interest rate cut at its November 7 meeting to pricing in doubts that the central bank will deliver even a 25 basis point cut.
September 30, 2024 | Daily JAM, Mid Term, Special Reports, Top 50 Stocks, TSLA, TSM |
I don’t know which candidate will win the election. Right now the polls are within the margin of error on the national level–and even tighter in the seven battleground states that will likely decide the electionm. But I do know the results on November 5 will move stocks. Some right off the bat even before the results are certified. Ans more significantly as a new administration clarifies its policy views and takes office.The results will move the stock market in general
And they will move individual stocks and sectors in particular.
September 11, 2024 | Daily JAM, Morning Briefing |
Definitely a mixed bag in the Consumer Price Index inflation report for August released today. I think the mixed results lower the odds of an aggressive 50 basis point interest rate cut at next week’s Federal Reserve meeting. But they keep the odds of a cut–most likely 25 basis points–at 100%.
August 30, 2024 | Daily JAM, Morning Briefing |
Today August 30 the Personal Consumption Expenditures index, the Federal Reserve’s preferred measure of inflation, showed core prices rose by just 0.2% in June. On a three-month annualized basis, core inflation, which doesn’t include volatile food and energy prices, climbed at a 1.7% rate, the Bureau of Economic Analysis reported. That’s the slowest rate of increase this year.
August 14, 2024 | Daily JAM, Mid Term, Morning Briefing |
Core CPI inflation rose at a 3.2% annual rate in July. That was the slowest rate of increase since early 2021.And that rate of increase was low enough to keep the Federal Reserve on track for cutting interest rates at its September 18 meeting.
August 11, 2024 | Daily JAM, Morning Briefing |
Expect a final inflation test before the Federal Reserve meets on September 18. Unless there’s a huge surprise in the Wednesday, August 14, CPI report, the Fed will cut interest rates for the first time at that meeting.
