Only 13 bps now in the 2s/10s yield spread. What is the most striking aspect of this move is the extent of it in just two days and how the acceleration came out of nowhere right after a supposed amicable meeting between the US and China. It's almost as if the bond market screamed out, "It's too late, the growth slowdown underway can't be reversed. Tariffs are still …
Free Access
Succinct Summation of the Week’s Events – 11/30
Positives 1) There is an opportunity Saturday night to at least postpone further tariffs as both sides seem interested in some détente. Even Robert Lighthizer is optimistic. 2) Jay Powell gave himself some breathing room and flexibility in terms of the timing of achieving his goal of an eventual 3%-ish fed funds rate. 3) The headline PCE inflation deflator …
[Read more...] about Succinct Summation of the Week’s Events – 11/30
Are we there yet?
For a market that is so beholden to monetary policy and desperately wanting to know 'are we there yet?' in terms of ending the tightening, I only thought of this yesterday after Powell basically said we are: https://www.youtube.com/watch?v=18AzodTPG5U. BUT, as long as QT is still in place, we really aren't there just yet. Their balance sheet is still expected to …
Powell
The markets are latching on to two words in the Jay Powell speech, “just below” referring to where he thinks the neutral rate is. We know that no one really knows what the neutral rate really is but I “just below” is different then what he said in October when he said “we’re a long way from neutral at this point, probably.” Of course we’re playing a game of …
Succinct Summation of the Week’s Events – 11/23
Positives 1) The average 30 yr US mortgage rate was little changed w/o/w at 5.16%, just off the 8 1/2 year high of 5.17% last week. Purchases did rebound by 3.1% w/o/w off the lowest level since February 2017 but they are down 4.8% y/o/y. 2) Existing home sales in October totaled 5.22mm, a touch above the estimate of 5.2mm and up from 5.15mm in September. The …
[Read more...] about Succinct Summation of the Week’s Events – 11/23
The FAANG trade is dead
The FAANG trade is dead. Dead in the sense of it as a homogeneous group. This not long after the New York Stock Exchange created a FAANG index called the NYSE FANG+ Index where you can trade options and futures, https://www.theice.com/fangplus. Now the group has completely splintered with the Apple earnings news the last straw. Each stock will now stand on its own. In …
Succinct Summation of the Week’s Events – 11/9
Positives 1) The FOMC statement was as uneventful as can be but that itself is a message from the Fed that nothing that occurred in October is going to alter their interest in raising rates again in December. 2) Initial jobless claims at 214k was as expected and little changed from 215k last week. The 4 week average also held at 214k. Continuing claims, delayed …
[Read more...] about Succinct Summation of the Week’s Events – 11/9
Interesting times
As I've expressed my opinion before, because the big legislative initiative of a tax bill is done, nothing was going to be of near relevance to the economy and the markets regardless of who ran the House in the coming two years. Rates and the direction of the China negotiations remain of the greatest importance. Will the results of the election influence the latter? …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.