January 12, 2018 | Daily JAM, Morning Briefing, Short Term |
This morning the yield on the two-year Treasury note hit 2%. The yield on this shortish term Treasury, which is extremely sensitive to expectations on interest rate moves by the Federal Reserve, hasn’t seen 2% since September 2008. The yield on the two-year Treasury is now up 17 basis points in a month and 83 basis points in a year. That’s an extraordinarily fast climb in yields and remember that bond prices fall as yields rise
January 9, 2018 | Uncategorized, You Might Have Missed |
2017 left investors with a huge challenge as we all move into 2018. After a 21.6% return on the Standard & Poor’s 500 stocks in 2017, do we let the money ride for 2018 or move it into other assets? Some stocks had almost unbelievable years in 2017. Amazon (AMZN) was up 56% for the year an Facebook (FB) climbed 53%. But those gains were left in the dust by the 96% gain on Alibaba (BABA) and the 115% racked up by Tencent Holdings (TCEHY). And even stocks seem to be standing still in comparison to biotech such as Madrigal Pharmaceuticals (MDGL), up 510% in 2017 or Sangamo Therapeutics (SGMO) ahead by 466%. For 2018 should you leave your money in those big winners from last year? Take some of it off the table and put it into laggards? Move some of it to cash?
January 3, 2018 | Daily JAM, You Might Have Missed |
If you try to interpret the minutes released today from the Federal Reserve’s December 12-13 meeting without factoring in the departure of key players at the central bank, I think you’ll get the meaning of that meeting exactly wrong. On the surface, the minutes seem to show a Fed with strong reservations about raising interest rates. The presidents of two regional Federal Reserve banks, Neel Kashkari of the Minneapolis Fed and Charles Evans of the Chicago Fed dissented from the decision at that meeting to raised the Fed’s benchmark Fed funds rate by another 25 basis points.
December 22, 2017 | Daily JAM, Notes You Need |
In my daily trawling through the market I come upon lots of tidbits of knowledge that I think are important to investors but that don’t justify a full post. I’ve decided to start compiling these notes here each day in a kind of running mini blog that I’m calling Notes You Need. A typical post looks much like this entry from today: 11:20 a.m.: Continued weak inflation in November. The PCE (Personal Consumption Expenditures) index rose 0.2% in November from October. Economists surveyed by Briefing.com had expected a 0.3% month over month increase. The Core PCE was up just 0.1% month over month. “The PCE Index is the Federal Reserve’s preferred inflation measure. Year over year the Core PCE Index is up 1.5%.”
December 11, 2017 | Daily JAM, Mid Term, Morning Briefing |
I don’t expect the Federal Reserve to say anything especially revealing abut future interest rates after the Wednesday, December 13, meeting of the Federal Open Market Committee in the last scheduled post-meeting press event of the Janet Yellen Federal Reserve, resolutely stay the rhetorical course. But that likely reticence isn’t stopping economists from moving toward projecting more and faster interest rate increases in 2018.
November 15, 2017 | Daily JAM, Morning Briefing |
The Labor Department reported today that headline inflation, the all items version of the Consumer Price Index, rose 0.1% in October to a year over year rate of 2.0%. The core Consumer Price Index, which excludes more volatile food and energy prices, rose 0.2% in the month and is now up 1.8% year over year. This is the first increase in the core index after five months where readings were stuck at an annual rate of 1.7%.
November 13, 2017 | Daily JAM, Morning Briefing |
It’s not the actual inflation rate but for the Federal Reserve it’s perhaps even more important: In the latest survey of 1,200 households for October, the New York Fed Reserve Bank sees an increase in expectations for inflation in October 2018 to 2.61%. That’s up from the 2.54% expected increase in inflation over the next 12 months recorded in this survey in September.
October 30, 2017 | Daily JAM, Uncategorized |
In my daily trawling through the market I come upon lots of tidbits of knowledge that I think are important to investors but that don’t justify a full post. I’ve decided to start compiling these notes here each day in a kind of running mini blog that I’m calling Notes You Need. This mini-blog includes items like this from today: “11:40 a.m.: The PCE Price Index, the Federal Reserve’s preferred measure of inflation rise by 0.4% in September and is now up 1.6% year over year. In August the index was ahead 1.4% year over year. The core index, which excludes food and energy, was uo 1.3% year over year. Nothing here to change the odds on the Federal Reserve raising interest rates at its December 13 meeting.”
September 29, 2017 | Daily JAM, Morning Briefing |
For August the Personal Consumption Expenditures Price Index, the Federal Reserve’s preferred inflation measure, showed an increase in core inflation of just 0.1%. Economists had projected an increase of 0.2% for the month. Year over year the core PCE Index is up 1.3%, well short of the Fed’s target inflation rate of 2%.
September 18, 2017 | Daily JAM, Morning Briefing |
On this Wednesday, when we get the September Dot Plot from the Federal Reserve, the key dots to watch are for inflation and interest rates, again. Wall Street opinion is starting to look for a lower inflation central tendency for 2018 of 1.5% rather than the 1.8% of June. On interest rates, thoughts are that the central tendency for 2018 might drop further at the high end of opinion to 2.5% or even lower.
September 15, 2017 | Daily JAM, Morning Briefing |
Yesterday’s report of a slight uptick in inflation has pushed odds higher for a December interest rate increase from the Federal Reserve. The report, however, had no effect on odds in the Fed Funds Futures market for an increase at the Fed’s September 20 meeting.
September 11, 2017 | Daily JAM, Morning Briefing |
On Sunday the Chinese government announced that the headline Consumer Price Index (CPI)rose at a year over year rate of 1.8%. Economists had expected a 1.6% increase. The August rate was the fastest pace since January. Core CPI, that is without the effect of volatile prices for energy and food, rose at a 2.2% year over year rate.
