Wednesday , May 25 2022
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Tag Archives: CFNAI

Waiting For The US Economy To Cry “Uncle”

You can’t swing a cat without hitting a commentator discussing recession risk these days. And for good reason: there’s a growing list of potential threats to the economy. But forecasting a possible contraction in the future and monitoring events in real time are two different things and there’s always ambiguity about whether the two become one and the same. Hold that thought as we consider some of the evidence that while the potential for a new recession is lurking, the numbers...

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Weekly Market Pulse: Are We There Yet?

I’ll just get this out of the way right at the beginning. The question in the title of this post refers to the end of the ongoing stock market correction and the answer is likely no. There are no sure things in this business so it isn’t an unequivocal no, but based on history, the odds favor more weakness. I know a lot of people liked that rally into the close on Friday and it was a nice way to end a wild week but it also shows that traders/investors are all too willing, able, and...

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Weekly Market Pulse: This Again??!!

Here we go again. Or maybe, more accurately, here we go still. COVID has reared its ugly head again, this time in the form of a new variant called Omicron. The name surprised some folks because the next letter in the Greek alphabet was Nu, but the WHO thought that sounded too much like “new” so they skipped that one, as Greek speakers are generally confined to Greece these days. And the next letter was “Xi” which the WHO said was a common last name and that their...

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Weekly Market Pulse: Growth Scare?

A couple of weeks ago the 10-year Treasury note yield rose 16 basis points in the course of 5 trading days. That move was driven by near-term inflation fears as I discussed last week. Long-term inflation expectations were and are well behaved. I wrote nearly 2000 words last week about that change in inflation expectations and I’m so glad you took the time to read it. And now you can forget it because over the next four days all but 2 basis points of the move in the nominal 10-year was...

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Weekly Market Pulse: Inflation Scare!

The S&P 500 and Dow Jones Industrial stock averages made new all-time highs last week as bonds sold off, the 10-year Treasury note yield briefly breaking above 1.7% before a pretty good-sized rally Friday brought the yield back to 1.65%. And thus we’re right back where we were at the end of March when the 10-year yield hit its high for the year. Or are we? Well, yes, the 10-year is back where it was but that doesn’t mean everything else is and, as you’ve probably...

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Weekly Market Pulse: Time For A Taper Tantrum?

The Fed meets this week and is widely expected to say that it is talking about maybe reducing bond purchases sometime later this year or maybe next year or at least, someday. Jerome Powell will hold a press conference at which he’ll tell us that markets have nothing to worry about because even if they taper QE, interest rates aren’t going up for a long, long time. That statement might have more credibility if the Fed had been right about just about anything over the last decade....

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Weekly Market Pulse: The Illusion of Control

Jerome Powell delivered his long anticipated speech at Jackson Hole last week. Well actually, I have no idea if he was actually in Jackson Hole since the speech was delivered electronically, another victim of the delta variant. The virus itself rated barely a mention in Mr. Powell’s remarks and I think that is probably as it should be. There has been some economic impact from the recent virus surge but nothing like previous versions. COVID may not be over, but we are learning to live...

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Weekly Market Pulse: All or Nothing Investing

This week marks a change in our economic environment or at least our perception of it. Last year, post-COVID onset, we characterized the environment as one marked by a falling dollar and improving growth. To be exact, that is the environment the markets reflected; interest rates were rising, the yield curve was steepening and the dollar was falling. That changed somewhat at the beginning of the year when the dollar stopped falling and we shifted to a neutral dollar stance. Then, in the...

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Weekly Market Pulse: Buy The Dip, If You Can

If you were waiting for a correction in stock prices to put some money to work, you got your chance last week. The Dow Jones Industrial Average was down nearly 1000 points at the low Monday and closed down 725, a loss of a little over 2%. The S&P 500 did a little better but closed down 1.5%. It looked like the beginning of a beautiful correction, one for which we were way overdue. The reason everyone gave for the selloff was fear of the Delta variant, of which new cases and...

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Do Rising ‘Global’ Growth Concerns Include An Already *Slowing* US Economy?

Global factors, meaning that the wave of significantly higher deflationary potential (therefore, diminishing inflationary chances which were never good to begin with) in global bond yields the past five months have seemingly focused on troubles brewing outside the US. Overseas turmoil, it was called back in 2015, leaving by default a picture of relative American strength and harmony.The rest of the world’s economic system hasn’t really come back much, and there’s much to suggest we’ve...

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