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Tag Archives: TIPS

Weekly Market Pulse: What Yield Curve Inversion

Well that didn’t last long. I wrote last week about the inversion of the 10 year/2 year term spread as the yield of the 2 year Treasury note rose above the yield of the 10 year Treasury note. Using end of day data, the curve inverted on Friday, April 1st and stayed that way until….Monday April 4th. The spread closed last Friday, April 8th at 19 basis points. Hmm. The inversion happened on April Fool’s day, huh? Sorry, I couldn’t resist poking a little fun at all the...

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Weekly Market Pulse: All Clear?

Why did stocks sell off in recent months? Was it the emergence of the Omicron variant? That was a popular narrative right after Thanksgiving but that lasted less than a month before stocks decided to look past COVID make a new high right after the new year. Was the correction due to fears of the Fed raising interest rates and stopping QE? Was it the run up to and eventual start of the Ukraine war? Or was it just that stocks got too expensive and no one wanted to buy at nosebleed levels? The...

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Consumers And Markets Both Agree, It’s Not Consumer Price Inflation

What do American consumers know that Jay Powell and the FOMC apparently don’t? Certainly, those voting policymakers at the Federal Reserve are going to start raising their policy rates for political reasons under pressure from politicians facing deeper and deeper economic scrutiny for every dollar higher in crude oil. The Fed, however, can’t extract any additional supplies of black gold from the ground anymore than it can fabricate semiconductors Taiwan won’t. Set aside all that, it’s also...

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Commodities Continue To Soar As Ukraine War Rages

Commodities remained the best-performing asset class by far last week for the major asset classes, based on a set of ETFs through Friday’s close (Mar. 4). The ongoing Ukraine war is the catalyst and for the immediate future more of the same appears to be the likely path ahead. WisdomTree Commodity Fund (GCC) surged more than 13% last week, delivering a blowout performance that left the rest of the field far behind. At some point there will be a dramatic reversal for prices of...

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An October (‘inflation’) Revolution

Most Americans understandably have tunnel vision when it comes to the American CPI and what it might portend for their personal circumstances. Gasoline prices and those for anyone trying to buy a car or now rent some kind of shelter, the threat is immediate. From this palpable sense, the word “transitory” today might just seem offensive.Yet, it may prove itself anyway. As discussed earlier in the week, not all Americans are laser-focused on the current price at the pump or what highly...

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Commodities Continued Rising Last Week, Topping Global Markets

A broad measure of commodities continued rising last week, delivering the strongest performance by far for the major asset classes, based on a set of ETFs for trading through Friday’s close (Feb. 11). WisdomTree Enhanced Commodity Strategy Fund (GCC) rose 2.0% last week, extending a rally that began more than two months ago. The ETF is up 15% from its previous low on Dec. 1.   The fundamentals of supply and demand are providing the bullish backdrop for commodities. “This is...

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Let’s Talk TIPS

Real yields have moved higher, surging, actually, to start this year (up until more recently, that is). The 5-year TIPS rate has gone from ungodly ugly mid-November, sunk down to -191 bps, to a still-awful but much less so -130 bps as of today. That’s a 61 bps move in less than two months, thirty of those coming since the end of December.Good news? Something else?No sense in dragging this out, spoiler alert, the answer is quite clearly something else. Unless you take the Fed’s rate hikes...

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Weekly Market Pulse: On Second Thought…

In individuals, insanity is rare; but in groups, parties, nations, and epochs, it is the rule. Friedrich Nietzsche   The new year got off to quite a bang last week. It was almost as if someone flipped a switch and investors/traders suddenly decided that all that stuff they believed last year was just so passe. Growth stocks? Nah, who wants those? Crypto? Are you frigging kidding me? Inflation? No, that’s past its prime. Bonds? Not only no, but hell no. TIPS? Don’t need those...

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One Shock Case For ‘Irrational Exuberance’ Reaching A Quarter-Century

Have oil producers shot themselves in the foot, while at the same time stabbing the global economy in the back? It’d be quite a feat if it turns out to be the case, one of those historical oddities that when anyone might honestly look back on it from the future still hung in disbelief. Let’s start by reviewing just the facts. First up, yesterday the Federal Reserve published the November 2021 estimates for Industrial Production in the United States. As has been the case around the rest of...

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Omicron Fears Fading, CPI Huge-r Still, Fed Hinting At Accelerated Taper, And Yet Euro$ Inversion (and other things) Is Still Here

The bond market is imploding, right? It has to be going by everything you hear. Did you know that the last two 30-year bond auctions had gone “awry”, as one mainstream news outlet put it? Another “media” shop declared them “catastrophic.”The second of those long bond sales was conducted just yesterday afternoon, right in time to run into the buzzsaw of the November CPI figures released today. According to the BLS, yep, the highest rate of general consumer price increases going...

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