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Tag Archives: Fed Policy

Weighing the Week Ahead: A De Facto Expansion of the Fed’s Mandate?

The economic calendar is normal, highlighting housing data, leading indicators, and the FOMC decision. The pundit conversation remains all about the Fed, but a new angle is getting more attention. The talking heads will not raise the question explicitly – sticking to personal ideas of what the Fed should be doing. The implication? Are we witnessing a de facto expansion of the Fed’s dual mandate? In last week’s installment of WTWA, I guessed that, despite the economic data, the punditry...

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Weighing the Week Ahead: Should Investors Bank on the Fed?

The economic calendar is important, featuring inflation data, two elements of the NBER “big four,” consumer confidence, and the JOLTS report. Those needing a fix of FedSpeak are out of luck since it is the quiet period for them. The data all point to an intersection between economic strength and the Fed. The question for stock investors will be: Should equity investors rely on the Fed to support stock prices? In last week’s installment of WTWA, I expected a search for meaning in the...

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Weighing the Week Ahead: What is Your Course for Uncharted Waters?

We have a short week and one extremely light in scheduled news and economic data. Even the Wed-Fri stretch comes before another holiday weekend. In addition, the government shutdown will delay scheduled reports. Given the continuing divergence between economic news and market prices, that might not matter! Pundits have plenty to talk about. We are beginning to see articles and TV segments about “protecting your portfolio.” This has been a challenge with declines in all asset classes and...

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Gundlach’s Remarks Mean It’s Time To Check Your Allocation

“This is a capital preservation market.” So says Jeffrey Gundlach who can’t argue with anyone who wants to invest in the 2-Year U.S. Treasury, currently yielding around 2.7%. If you choose the 10-year, by contrast, and saddle yourself with 8 more years, you get less than 20 basis points of extra yield. Gundlach is one of the world’s best investors, especially when it comes to bonds, And that means investors can’t always follow him literally because they’re not paying attention to global...

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Weighing the Week Ahead: Market Storm Averted?

We have another normal economic calendar. The election is behind us. The Fed decision is behind us. What next? Some of the punditry convened after Wednesday’s rally to say that it was time to get “back to reality.” Others are wondering about a year-end rally. Since everyone keys off what happened the day before (!!) the preponderance of commentary might go either way. In either case, I expect pundits, to look back at recent volatility, technical support levels, and headline risk. They will be...

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Weighing the Week Ahead: Market Storm Averted?

We have another normal economic calendar. The election is behind us. The Fed decision is behind us. What next? Some of the punditry convened after Wednesday’s rally to say that it was time to get “back to reality.” Others are wondering about a year-end rally. Since everyone keys off what happened the day before (!!) the preponderance of commentary might go either way. In either case, I expect pundits, to look back at recent volatility, technical support levels, and headline risk. They will be...

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Weighing the Week Ahead: Can Earnings Season Spark a Rebound in Stocks?

We have a normal economic calendar with a focus on housing data. Earnings season will be in full swing. The background for this news will, of course, be the stock market volatility and decline of the past week. That story will command the early-week attention, especially if aggressive selling resumes. Recent earnings seasons have buoyed stocks, leaving the punditry with this question: Can earnings season spark a rebound in stocks? In my last edition of WTWA I took note of rising interest...

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Weighing the Week Ahead: Asking the Right Questions

There is a big economic calendar featuring the most important monthly reports – employment, ISM manufacturing, ISM services, and auto sales. In normal times we would be analyzing the data and the implications for corporate earnings and interest rates. There will be some of that, of course, but the “real” market news seems to be taking a back seat. With the media focused on non-market events, it allows investors to ask the right question: Where can some additional work provide a big payoff?...

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Weighing the Week Ahead: Inflation Watch

There is a big economic calendar competing with mid-term election campaign stories. The increase in hourly wages in the employment report offset some market enthusiasm about continuing job market strength. With inflation concerns on a hair trigger, expect special focus on this week’s PPI and CPI. The Beige Book and JOLTS report will also get pundit scrutiny. Expect pundit focus to be on Inflation Watch. Once again, this is the wrong emphasis. More on that below. In my last edition of WTWA I...

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Weighing the Week Ahead: Should Investors Worry about the Yield Curve?

Once again, the economic calendar is fairly light. Vacations continue for many. The upcoming Labor Day weekend will tempt many market participants to end this week early. Financial news seems more like political news these days. Much of the punditry is focused on a death watch for the bull market, with daily discuss of the flattening yield curve and speculation about when it will “invert.” This is not the right question. Pundits should be asking: Should investors be worried about the yield...

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