Of all the Fed speak yesterday, it was the comments from the Dallas Fed President Robert Kaplan to Reuters that was most noteworthy I believe and should be paid heed to. Now a voter in 2020, he's the first Fed member that is expressing some concern with the side effects of the epic increase, in terms of rapidity, in the Fed's balance sheet. However termed, it's hard …
[Read more...] about The most noteworthy thing said yesterday
With the Fed speak today, here’s a chart of the Fed’s balance sheet in white and the S&P 500 in orange since mid August, just before the balance sheet skyrocketed in size. Coincidence? No. It’s in part psychological and certainly in part due to the desperate search for yield so it really doesn’t matter that the Fed doesn’t think this isn’t QE. The market has …
[Read more...] about Fed balance sheet, SPX,valuations/Jobless claims
Driven again by skyrocketing food prices, China said its December CPI rose 4.5% y/o/y, the same pace as in November but that was two tenths less than expected. Food prices rose 17.4% y/o/y again driven by pork prices which were up by 97% y/o/y. Taking this and energy out though and prices rose a more benign 1.4%, unchanged with the month prior. While the PBOC will …
The benchmark 10 yr note auction was a mixed bag. The yield of 1.869% was higher by almost 1.5 bps from the when issued level (10 yr yield got to 1.70% overnight). The bid to cover of 2.45 was a touch above the year average of 2.42 but dealers were left with 29% of the auction vs the 12 month average of 25%. Bottom line, I’m sticking to my belief that long yields …
ADP said a net 202k private sector jobs were created in December, well more than the estimate of 160k and they dramatically revised up its November print to 124k from 67k. That's quite a revision and maybe points to whatever methodology they are using that didn't work too well initially. Smoothing out the noise has the 3 month private sector average at 159k vs the …
After the panic 50 pt decline last night in the S&P futures, I believe the markets response this morning is rational in the belief that these missile launches are likely the end of this spat rather than a further escalation. I'm no geopolitical expert but just my guess based on what Iran said immediately after the launches. I mean an oil price little changed at …
The ISM services index for December rose to 55 from 53.9, .5 pt better than expected and compares with 54.7 in the month prior. This brings the 2019 average monthly print to 55.5. The internals though were mixed. Business activity got back what it lost in November but only 10 of 18 industries saw growth. New orders dropped by 2.2 pts to a 3 month low and backlogs fell …
[Read more...] about ISM services- better headline, mixed internals
Well, at least for now it looks like, where the price of oil goes, so goes the S&P. Yesterday's rebound in stocks coincided with the slip in oil prices. No other explanations needed until something else takes over and/or the drama of the geopolitics calm down. As I stated my belief yesterday, it's rare that geopolitics has a lasting impact on the economy and …
I don't want to downplay the importance of the current geopolitical situation but most usually have a fleeting impact on the economy and markets. I understand the tinder box that the Middle East is but unless WTI breaks above $75, I think there will be little impact on economic activity. I say $75 not on some econometric modeling but just because that was the multi …
On this last day of 2019 there are only a few things to mention. One is that this will be my last writing until Monday January 6th. Cheers to 2020. The notable mover today is the continued weakness in the US dollar as the euro heavy dollar index is lower for the 7th straight day to a level last seen at the end of June. Whether its due to the Fed's expansion of …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.
