Positives 1)The virus count continues to slow in China and in most of the rest of Asia. 2)More and more places are shutting down in order to contain the spread which hopefully leads to a quicker reopening. 3)The Fed takes steps to backstop the commercial paper market and prime money market funds. Swap lines are tapped and cross currency basis swap prices …
[Read more...] about Succinct Summation of the Tough Week’s Events: 3/20
Whether it was the Governor of Florida essentially telling spring breakers to do their beer funnels in the comfort of their parents house alone rather than at the beach or California announcing to all that they need to stay home, they are the further needed steps to get in control of this virus spread. Again, the faster we all shut down, the quicker we …
[Read more...] about Do your beer funnels at your parents house, alone
Initial jobless claims totaled 281k for the week ended March 14th, up 70k on the week. This is just the beginning of what will be a large and unfortunate rush for unemployment benefits. No more color is needed. Initial Jobless Claims The March Philly manufacturing index fell to -12.7 from +36.7 with new orders going to -15.5 from +33.6, new orders down 14.8 …
Central banks are again announcing more steps to fill liquidity holes, reduce rates, etc... The Fed last night created The Money Market Mutual Fund Liquidity Facility that would "enhance the liquidity and smooth functioning of money markets, support the flow of credit to hard working Americans, and help stabilize the broader financial system." It is essentially back …
[Read more...] about Central banks bring some more firepower
The fiscal largess that is coming our way is again weighing on global sovereign bonds with now the previous save havens of longer term US Treasuries, German Bunds, UK Gilts and Japanese JGB's no longer. The US 10 yr yield is up another 3 bps after yesterday's dramatic 36 bps spike. UK and German 10 yr yields are higher by about 15 bps while Japanese yields are up by 6 …
[Read more...] about Bond yields/Swap lines/Sentiment/Housing
Here is a March number. The NAHB home builder sentiment hung in real well falling just 2 pts m/o/m to 72. The estimate was 73. But, about half were collected before March 4th and thus doesn’t reflect what has happened since. Some worry though creeped in as the Expectations component fell 4 pts m/o/m to the lowest since September 2019. About 20% of builders did express …
No that it matters because what is done is done but voting member and Cleveland Fed President Loretta Mester is today expressing her disagreement and dissent with the Fed decision to cut rates to zero. She was “fully supportive of all of the actions taken to promote the smooth functioning of markets and the flow of credit to households and businesses but preferred …
If there is a lesson (among many) to be learned here, one that households learned after 2007-2009, on the part of Corporate America is that no amount of encouragement by the Federal Reserve to go out and borrow a lot of money because of easy money, just say no. That is what will follow when this crisis is over, a focus on improving balance sheets and the era of borrow …
[Read more...] about A lesson/Phase 3?/Weakness in European bonds
So the real world economic impact now starts to get quantified with the March data in coming weeks. Today was the first, the NY manufacturing index fell to -21.5 from +12.9. The estimate was +3 but I have no idea why it was that high. New orders, shipments, employment and hours worked all fell below zero. Backlogs are close at 1.4. Prices paid were little changed but …
I think Holman Jenkins editorial in the weekend's WSJ said it well with everything going on. "Curtailing economic activity is how we fight the virus. Unfortunately, a recession is part of the cure for an epidemic of communicable disease." As I've been saying for a few weeks, I believe the faster we shut down, the faster we get this under control, both in terms of …
[Read more...] about “a recession is part of the cure for an epidemic of communicable disease”
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.
