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Stocks have moved higher over the past week, once again led by “Big Tech”. Bonds and corresponding yields have mainly stayed put. All this has occurred as investors waited for the release of Thursday’s June CPI report. Analysts were predicting a further drop in inflation compared to May (MOM or month-over-month) and this time last… Read the full article.
On Friday, we got some good news on the inflation front with a lower than forecast PCE report. This should have caused bond yields to drop and bond prices to rise. Stocks of all types should have followed suit with interest rate sensitive sectors like real estate, dividend payers, small caps and the like leading… Read the full article.
We are seeing some rotation out of tech, which I commented on last week. To me, this is necessary and gives us a chance for the market to broaden and other sectors to catch up. Simply put, one horse (no matter how big) cannot pull the weight of the world forever. On the economic front,… Read the full article.
We are starting to see some weaker economic data trickle in – a surprise drop in inflation data and higher jobless claims last week. This week we saw weaker than expected consumer spending (finally) and elevated jobless claims again. While we are still at historic lows in unemployment, claims are increasing. All this means the… Read the full article.
This past Friday, we got a very strong non-farm jobs number, yet unemployment overall ticked higher to 4%. This presents a bit of mixed messages on the economy, and the all-important interest rate situation. On one hand, businesses are still hiring, yet it appears to be limited to certain sectors. The headline employment rate has… Read the full article.
This week we have seen continued backfilling (selling) by the main stock indices. This is not unexpected after the jump up we saw earlier in the month. The S&P 500 and Nasdaq remain above their respective 50-day moving averages while the Dow has broken down and is now well below it. This disparity is due… Read the full article.
This week we have seen the broad stock indices take a break and pull back following the recent bounce back above their 50-day moving averages. Bond yields have crept higher as well. The correlation between stocks and bond yields is no coincidence and is the result of continued restrictive Fed (the Federal Reserve) policy (high… Read the full article.
Well, just like that stocks (the main indices) bounced back to reclaim their respective 50-day moving averages last week. Over four short trading days, investors put a technical end to the correction that began one month ago. Bonds have seen some daylight as well, with the 10-Year Treasury yield falling back below 4.5%. It seems… Read the full article.
The past few days have seen a deluge of earnings data as well as the conclusion of the Federal Reserve meeting. Earnings continue to come in above estimates, but we are starting to see some cracks, most notable in big tech and the AI darlings. As everyone knows this niche of the economy has carried… Read the full article.
Last week we saw two sets of conflicting data points. Earnings are coming in above expectations, which is good, and inflation is also coming in above expectations, which is bad. The Fed’s preferred PCE report hit the wire Friday morning and showed a rise of 2.8% year over year. The expectation was 2.7%. Month over… Read the full article.
The market correction continues in the face of the reality that rate cuts are likely not on the way anytime soon. We have seen three straight months of sticky inflation, coupled with a red-hot economy and a very strong job market. It is obvious that the tail risk right now is higher inflation, not a… Read the full article.
Investors got the March CPI numbers yesterday (Wednesday) morning and unfortunately, they came in above expectations pretty much across the board. The rising inflation we saw in the January and February data appears to be a trend – and a trend in the wrong direction. Prices for rent, insurance and other swaths of the economy… Read the full article.
Last Friday we got the PCE inflation report, and it was “in line” with expectations. This followed two reports (CPI and PPI) earlier in the month that were hotter than expected. I was worried that another similar report would be the catalyst for higher bond yields and a correction in stocks. The reason is two-fold…. Read the full article.
Stocks are closing the first quarter of 2024 on solid footing. Tech has continued to outperform, and high beta sectors have beaten low beta sectors. The last couple of weeks have seen some rotation, which may reflect that tech has gotten ahead of itself and there is some value (and less risk) in other places. … Read the full article.
We got February inflation data last week in the form of the CPI on Tuesday and PPI on Thursday. Both reports came in above expectations and evidence the fact that inflation is still hanging around and we are still some distance away from the Federal Reserve’s (the “Fed”) stated target of 2%. Bonds immediately… Read the full article.
Late last week, we got the much-anticipated PCE (Personal Consumption Expenditures) report. This is the Federal Reserve’s favorite inflation indicator. After two fairly hot inflation reports in February, this was important to see whether the downward trend in inflation remains in place. The market was looking for a .3% month-over-month increase and 2.4% twelve-month increase… Read the full article.
The past week we have seen two separate inflation measures (CPI and PPI) come in above expectations. This has increased upward pressure on interest rates while reducing chances the Federal Reserve (the “Fed”) will cut rates anytime soon. The message from our Central Bank has been clear that rate cutting will not begin until it… Read the full article.
The market cap-weighted stock indices continue to march higher after a brief pullback in early January. This continues to be led by technology stocks, while most other sectors are underperforming. Bonds, real estate, utilities, dividend paying stocks and other interest rate sensitive assets remain under pressure as yields have bounced above 4% again. Chairman… Read the full article.
The new year has started off with a return to the patterns of 2023. Interest rates have jumped, on concerns that the Federal Reserve (the “Fed”) will not cut interest rates as quickly as hoped. During the fourth quarter of last year, the bond market priced in a nearly 70% chance of a March rate… Read the full article.
The stock market continues to try and digest the outsized gains we saw in November and December. We’ve seen a whole lot of grinding nowhere since the new year began as investors evaluate whether we got ahead of ourselves with the assumption that interest rate cuts are imminent. The bond market is driving things as… Read the full article.
