June 22, 2022 | Daily JAM, Morning Briefing, Videos |
My one-hundred-and-forty-eighth YouTube video “Ouch! The Fed Gets Honest About Inflation” went up today. In front of the Senate Finance Committee today, Fed chair Jerome Powell said that the Fed has all the tools it needs to fight inflation–except, he admitted, that nothing it does to raise interest rates will lower the price of gasoline or food. Those prices don’t figure into the core inflation rate the Fed watches, but they are very real to consumers. More money spent on food and fuel means less money available for everything else.
June 22, 2022 | Daily JAM |
Lennar (LEN) has started trimming prices and offering buyer incentives to bolster sales. The bad news here is that a slowing housing market is an early indicator of rising odds of a recession. The good news is that this is supposed to be what happens–the housing sector slows–when the Federal Reserve raises interest rates to fight inflation.
June 20, 2022 | Daily JAM, Videos |
My one-hundred-and-forty-seventh YouTube video “Rip the Band-Aid Off on Interest Rates” went up today. My Trend of the Week video this week looks at hedge fund gurus who have been yelling that the Federal Reserve needs even bigger interest rate increases than the 0.75% hike the central bank delivered on June 15. Most of these hedge fund managers are arguing their own book–since they’re short Treasuries–but that doesn’t mean they are wrong in their predictions for how high rates will need to go before we see inflation start to come down.
June 20, 2022 | Daily JAM, Dividend Income, PFXF, VGSH |
I’ve probably overstayed my welcome in the Vanguard Short-Term Treasury ETF (VGSH) and the VanEck Preferred Securities ex-Financials ETF (PFXF), but with the Federal Reserve accelerating its interest rate increases, I think selling these two members of my Dividend Portfolio is a bit more pressing right now.
June 15, 2022 | Daily JAM, Morning Briefing, Videos |
My one-hundred-and-forty-fifth YouTube video “Fed Hike Makes the Market Happy” went up today. The Federal Reserve raised interest rates by 75 basis points today–instead of the 50 points so widely expected just weeks ago–and stocks rallied. Here’s the Wall Street narrative that explains why.
June 13, 2022 | Daily JAM, Special Reports |
It is different this time: Part 1 and Part 2 of my Special Report: Your Best Investment Strategy for the Next 5 Years. And finally the full Part 3 with strategies and picks for the 5-year period including the “out” years. It’s likely to “be different this time” for the next five years or so. And you need an investment strategy for that period.
June 13, 2022 | Daily JAM, Morning Briefing |
The latest Consumer Expectations survey (that is for May) from the New York Federal Reserve shows U.S. households’ anticipate inflation will rise at a 6.6% annual rate over the next year. That’s up from April expectations for a 6.3% rate. The May anticipated rate matches March results in the survey for the highest inflation anticipation on record.
June 12, 2022 | Daily JAM, Friday Trick or Trend |
At its March 16 meeting the Federal Reserve’s Dot Plot showed Fed officials forecasting that the Fed’s short-term interest rate, now set at 0.75% to 1.00%, would end 2022 at 1.9%. Things have changed since then with the Federal Reserve due to meet on Wednesday, June 15. There’s currently a fairly large divergence on interest rate expectations for the end of 2022.The June meeting and the new Federal Reserve Dot Plot showing the consensus forecast by Fed officials will go a long way to narrowing that divergence. But I don’t expect all disagreement to vanish from the markets on Wednesday. And I do expect that resolving this disagreement will present a bumpy road to the financial markets.
June 11, 2022 | Daily JAM, Weekend JAM |
After Friday’s gut punch to stocks, the Wednesday, June 15, the meeting of the Federal Reserve’s interest-rate will be even more important for stock market direction. I argued back on June 2 in my video “Beware the Fed’s Dot Plot” that the June 15 meeting was likely to create big waves in the financial markets. Investors and traders would be ready to buy or sell big time depending on what the Fed said in its Dot Plot about its expectations for future interest rates, inflation, and economic growth. The Fed had already lowered its projections for economic growth, raised its projections for inflation, and increased its projections for interest rates at the end of 2022 and in 2023 at its March 16 meeting and the release of a Dot Plot on future expectations.Now, though, after inflation rose aggressively to an annual 8.6% rate in the May Consumer Price Index report on Friday, the stakes are even higher.
June 10, 2022 | Daily JAM |
The yield on the 10-year Treasury climbed 12 basis points today to 3.16%. The yield on the 30-year Treasury rose to 3.20% from 3.17% yesterday, June 9. The yield on the 5-year treasury reached 3.25%, up from 3.07% yesterday and above the yield on the 10-year maturity. The yield on the 2-year Treasury, which tends to be the most sensitive maturity to increases in the Federal Reserve’s short-term benchmark interest rate, climbed to 3.06% from 2.82% yesterday. In light of the 8.6% annual CPI inflation rate announced today, bond traders increased their bets on a 75 basis point interest rate hike from the Federal Reserve at both its June 15 meeting (that’s next Wednesday) and at the July 27 meeting.
June 10, 2022 | Daily JAM, Morning Briefing |
Headline Consumer Price Index inflation in May rose to a new annual high rate of 8.6% in May, the Bureau of Labor Statistics reported today, June 10. Headline prices rose 1% from April. The big drivers were, as expected, food (with prices up at a 10.1% annual rate) and energy. The core CPI, which strips out food and energy prices, rose 0.6% in May from April and at a 6% annual rate.
June 2, 2022 | Daily JAM, Morning Briefing |
The U.S. economy added 390,000 jobs in May, the Labor Department reported this morning. Economists had expected the economy to add 318.000 jobs for the month. In April the economy added a revised 436,000 jobs. The unemployment rate stayed steady at 3.6%. Economists had expected a drop to 3.5%.
