2-Year & Fed Funds in Harmony Today
More hotter than expected inflation came in on Thursday and several Fed heads were out in the media reinforcing their higher for longer message. While the 2-Year has bounced this month it is currently sitting right on the Fed Funds Rate, meaning temporary perfect equilibrium. The next thing to watch for is when the 2-Year hits 4%. That will confirm the rate hike cycle is officially and firmly over. I expect to see that next quarter. I also want to […]
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Date: February 17, 2023
Recession Crowd Remains Wrong
On Tuesday, the government released the Consumer Price Index which came in a little hotter than expected. Today, we saw that Retail Sales also came in stronger than expected. Once again, the economy remains stronger than expected which is a good thing no matter how the political pundits spin it. Remember last July when recession became political? I wonder what happened to all those nutjobs who were chirping that the U.S. was already in recession. They must be hanging out […]
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Date: February 15, 2023
Dollar, 2-Year & 10-Year Bouncing – Buy Pullback in Stocks
When you strongly dislike both teams in the Super Bowl along with their coaches, you root hard for a great game regardless of who wins. I think everyone would agree it was a great game. Long gone are the years when the NFC would trounce the AFC by 20+ points every year. I am sure all the arm chair coaches are out in full force this morning complaining about time management by the Eagles and referees that wanted that the […]
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Date: February 13, 2023
Rough Few Days for Stocks as Yields Rise
It’s been a rough few days for the stock market. After such a powerful move in January and into February that shouldn’t be a surprise. The other day I wrote that a mild or modest pullback should not shock anyone and should be used as a buying opportunity. Nothing has changed to make me think otherwise. Since Friday’s eye-popping employment report, market-driven interest rates have risen as stocks have declined. Below is the 2-Year Note with the Federal Funds Rate […]
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Date: February 10, 2023
Fireworks at the State of the Union
My thesis has been to buy any and all mild or modest pullbacks in stocks, bonds, gold and Bitcoin. Another opportunity presented itself on Tuesday morning after a small pullback. It certainly looked like Fed Chair Jay Powell’s remarks were going to be taken well and not the start of a more pronounced decline. And I was glad to not be sitting watching when stocks surged and then plunged on the release of his speech. During that time I shared […]
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Date: February 8, 2023
Inexplicably Strong Employment – Good News is Bad News
On Friday, the government announced that 517,000 new jobs were created in January. That’s about what I would expect. If the economy had just troughed and a new expansion was beginning. 500,000 new jobs almost two years into a recovery is almost unheard of. I thought it was a typo when I saw it. 187,000 was expected. I am still shaking my head, not fully believing the number. Of course, the conspiracy theorists are out in full force that Biden […]
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Date: February 6, 2023
Stock Market Has Done Nothing Wrong
Sorry for the late post. My flight home from Florida was delayed yesterday and it screwed up my schedule. It was 84 when I left and I saw it is supposed to be -25 in Vermont without the wind. The Fed did exactly what 99% of the country thought they were going to do, raise rates by 0.25%. They did a little wordsmithing with their statement. Jay Powell pretty much towed the line in his presser although in such a […]
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Date: February 3, 2023
Bulls Relentless – February Not So Bad – Fed to Hike Rates
I could not have been any more positive as 2023 began against the backdrop of Wall Street looking for a poor Q1 and first half. The stock market continues to behave very well, much to the dismay of the bears which are the majority. And I continue to laugh at their rationale as they hold tightly on to the notion that this is just another bear market rally that is doomed to fail. The market has strong leadership in the […]
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Date: February 1, 2023
***Q4 Client Update***
Many people like to read my very “brief” quarterly client update which I select excerpts. If you’re one of them, please read on. If not, feel free to stop now. Always happy to hear comments and questions. With the clock striking midnight on December 31st, the single worst year in diversified investing of the modern era ended. While it was a very challenging year for stocks with most of the larger indices down -20% to -30%, it was not a […]
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Date: January 30, 2023
Market Passes Another Test
On Wednesday I wrote about The Important Test that the stock market faced with Microsoft, MMM and Boeing all reporting either weaker than expected numbers or guided lower for at least Q1. Remember, if my bullish case was to be proven wrong for Q1, it would be because the market wasn’t prepared for even more corporate weakness. Look at the far right of the chart. Microsoft opened down about 5% and closed yesterday at new highs for 2023. MMM opened […]
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Date: January 27, 2023
