May 23, 2021 | Daily JAM, Short Term |
This week financial markets will be focused on Friday’s release personal consumption expenditures (PCE) index for April on Friday by the Bureau of Economic Analysis will release. The PCE is the Federal Reserve’s preferred inflation gage. It tends to run a bit lower than the Consumer Price Index which slowed inflation running at a 4.2% annual rate in April. Economists surveyed by Bloomberg are expecting that the PCE will show a 3.5% year over year increase in inflation. That would be the biggest increase since 2008. It would also be a huge acceleration from the 2.3% year over year increases recorded in March. On a month-over-month basis, the PCE likely increased by 0.6%. That would be a slight increase from the 0.5% month-over-month increase in March.
May 19, 2021 | Daily JAM |
The Wall Street adage “Sell in May and go away” looks to be spot on this year. At the close yesterday on May 18, the Invesco QQQ Trust ETF (QQQ), which tracks the NASDAQ 100, was still p 2.83% for 2021, but down 2.96% for the last three months and off 5.79% for the last month. But the full saying in its original form runs “Sell in May and go away; Don’t come back until St. Leger’s Day.” St. Leger’s Day marked the running of the third race in the British Triple Crown, which took place in September. The advice was to sell ahead of the quiet summer London social season. The adage as I learned it (not in England between the wars, mind you, since I’m not either that old or that patrician) advised to “Buy on NEA,” the big technology and venture capital conference usually held in November. That seasonal timing strategy let investors reap the gains from, historically, the six best months of the yer (November through April) and avoid the sluggish performance of May through October. From 1950 through 2019 the November through April period of each year saw the Standard & Poor’s 500 gain 2283.7 points, according to calculations by Jeffrey Hirsch in the Stock Trader’s Almanach. That’s against gains of just 610.79 points in the worst six months during that period. But this year? When should an investor or trader who has sold in May think about coming back?
May 19, 2021 | Daily JAM, Morning Briefing |
The minutes from the Federal Reserve’s April 28 meeting show officials at the central bank edging toward talking about when to cut bond buying and raise interest rates. Fed members said they need to see “substantial” further progress toward their goals of inflation that averages 2% and a full recovery in the labor market before slowing down $120 billion in monthly bond purchases. That’s language that the Fed had used before and has used since the meeting.
May 16, 2021 | Daily JAM |
Thursday’s auction of $13 billion in 10-year TIPS (Treasury Inflation-Protected Securities) will tell us not the trend in actual inflation, but something perhaps more important: what markets and investors expect from inflation. And in the short and medium term its those expectations that will move bond and stock prices.
May 12, 2021 | Daily JAM, Videos |
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. The twenty-third YouTube video “Five Stocks for an Inflation Scare” went up today.
May 12, 2021 | Daily JAM |
Today, May 13, investors and traders sold everything on the surprisingly strong April inflation report. This kind of sell everything reaction is typical of this first stage in a big market shift in sentiment. The question now is How long does this stage last? And When does the buying of winners in this new scenario kick in (along with continued but less violent selling of the losers?)
May 12, 2021 | Daily JAM, Morning Briefing |
Consumer prices, as measured by the Consumer Price Index (CPI) soared in April. For the month prices in the all-item index gained 0.8% for a 12-month increase of 4.2%. The core CPI, which excludes volatile prices in the food and energy sectors, was up 0.9% in April and is now up 3.0% over the last 12 months. But what’s it all mean?
May 11, 2021 | Daily JAM, Morning Briefing |
Stocks are down across the markets today–with the Standard & Poor’s 500 lower by 0.87% at the close, the Dow down 1.36%, and the NASDAQ Composite off 0.09%–ahead of tomorrow’s report on the Consumer Price Index read on inflation. But the real action today is in the CBOE S&P 500 Volatility Index (VIX) as investors and traders look to buy protection against potential volatility in case inflation, expected to head higher tomorrow for April, really spikes higher.
May 10, 2021 | Daily JAM, Morning Briefing |
Today’s drop in stocks–a drop of 1.04% for the Standard & Poor’s 500 and a loss of 2.55% for the NASDAQ Composite at the close on May 10–is a reminder that runaway economic growth is only one horn of the financial market’s fears about the Federal Reserve and higher interest rates.
May 9, 2021 | Daily JAM |
This week Wall Street analysts and economists, professional money managers, and individual investors and traders will “re-calculate” their expectations about the economy for the remainder of 2021. Friday’s surprisingly small addition of 266,000 jobs to the U.S. economy–instead of the 1 million projected by economists–will lead to a revisions in assumptions about inflation, interest rates, and economic growth for the rest of 2021.
May 5, 2021 | Daily JAM, Morning Briefing |
U.S. private employers in April added the most jobs in seven months, according to data from the ADP Research Institute released today. Company payrolls rose by 743,000 in the month. That’s a big gain from the upwardly revised 565,000 gain in March. And it’s the biggest money gain in jobs in seven months. That increases worries that Friday’s April jobs report from the Commerce Department will show a gain for the month of nearly 1 million new jobs. Good news for workers, of course, but that would increase fears in the financial markets that we’re seeing the kind of sustained, multi-month gains in jobs that the Federal Reserve has said it needs to see before it begins to raise interest rates.
April 15, 2021 | Daily JAM, Morning Briefing |
Initial claims for unemployment in regular state-run unemployment programs fell to 576,000 last week. Economists had projected 710,000 new claims for the week.
