April 29, 2018 | Daily JAM, Friday Trick or Trend |
Nobody expects the Federal Reserve to raise interest rates at its May 2 meeting. Or to be precise almost nobody expects the Fed to move. The odds of an interest rate increase by the Fed are just 6.2%, according to the CME Fed Watch Tool, which calculates the odds of a Fed move by looking at prices in the Fed Funds Futures market. In addition there’s no press conference scheduled nor will the Fed produce one of its updates of its projections on the likely performance of the economy. But this doesn’t mean the Wednesday meeting can’t swing the market.
April 27, 2018 | Morning Briefing |
U.S. GDP grew at an annualized rate of 2.3% in the first quarter, the Bureau of Economic Analysis announced this morning. Economists had expected growth of 2.1%. In the fourth quarter of 2017, the U.S. economy had grown at an annualized rate of 2.9%. But the rate of growth for the U.S. economy was overshadowed by other data in this morning’s report showing a significant increase in wages and inflation.
April 26, 2018 | Daily JAM |
The Bureau of Economic Analysis releases the first take on economic growth in the first quarter of 2018 tomorrow at 8:30 a.m. New York time. So by the time the financial markets open in New York, investors and traders will have had a chance to absorb the report and decide how they feel about it.Economists surveyed by Briefing.com are looking for the growth rate to drop to 2.1% for the quarter. That would be down from 2.9% in the fourth quarter of 2017 and from 2.3% for all of 2017.
March 31, 2018 | Uncategorized |
The week’s economic news reaches a crescendo with Friday’s report on March jobs. That Friday report will set the tone for the market’s take on the speed with which the Federal Reserve will raise interest rates at its next two meetings. Right now the Fed Funds futures market is showing almost no chance of an increase from the current 1.5% to 1.75% range at the May 2 meeting. The odds, however, soar to an 80.5% chance of an increase in interest rates at the Fed’s June 13 meeting
March 24, 2018 | Daily JAM |
Despite all the hoo-ha about tariffs, trade wars, and John Bolton’s appointment as national security advisor, the government will continue to pump out important economic data. This week the big day is Thursday (since Friday is a market holiday). That day sees the release of the Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditure index (PCE).
March 21, 2018 | Daily JAM, Mid Term |
Today, the Federal Reserve raised its benchmark short term interest rate another 25 basis points to a range of 1.5% to 1.75%. And forecast a steeper path of hikes in 2019 and 2020. Fed policy member remained divided over the outlook for 2018 with seven Fed officials projecting at least four interest rate increases in 2018 and eight expecting three or fewer.
March 16, 2018 | Daily JAM, Morning Briefing, Short Term, Volatility |
The U.S. stock market decided that today’s economic reports showed a glass half full. Interpretations pointing in the other direction, however, were easy enough to make so the end result wasn’t so much a wave of optimism lifting markets strongly higher as a sigh of relief. For the day the Standard & Poor’s 500 stock index was up 0.17%
March 15, 2018 | Daily JAM, Long Term, Volatility |
If you spend a significant part of your day staring at your computer to watch the markets, you know that, perplexingly, the traditional safe havens for mitigating portfolio risk haven’t been working very well. Now Goldman Sachs has put its computers and data crunchers to work and has reached the same conclusion as the anecdotal evidence suggested. Goldman has tagged this a period of “diversification desperation.”
March 15, 2018 | Daily JAM, Morning Briefing, Short Term |
Initial claims for unemployment for the week ended March 10 fell by by 4,000 to 226,000. That was in-line with projections from economists surveyed by Briefing.com. This is the 158th consecutive week that new claims for unemployment have been below 300,000. The less volatile 4-week moving average slipped by 750 to 221,500.
March 13, 2018 | Daily JAM, Morning Briefing |
After a worrying 0.5% jump in January, headline inflation as measured by the Consumer Price Index increased by just 02.% in February. That was right on the 0.2% mark expected by economists surveyed by Briefing.com. Core inflation, which excludes more volatile food and energy priced, rose 0.2% in February, again right at economist projections, after a 0.3% rise in January.
March 12, 2018 | Daily JAM, Short Term |
The U.S. Treasury sold $28 billion of three-year Treasury notes and $21 billion of 10-year notes today–and the price of the 10-year note actually climbed, taking the yield down to 2.87%, three basis points lower than Friday’s 2.90% yield. This was a good result for the bond market and for the U.S. Treasury
March 9, 2018 | Daily JAM, Mid Term, Volatility, You Might Have Missed |
It’s only March but I’m rethinking my take on 2018.When the calendar pages turned over into 2018, my take on the year was that for stocks the first half would be much like 2017: Despite rising interest rates from the Federal Reserve, there was enough earnings growth to move stocks up even from near record highs. The bond market would be more problematic with those interest rate increases keeping downward pressure on bond prices and upward pressure on bond yields. With inflation still relatively quiescent, though, the downward trend in bond prices would be relatively gradual. It was the second half of the year that investors had to worry about, I thought then.
