According to the latest JOLTs report from the BLS, the number of job hires has fallen back to levels from 2017. Despite the rate of hires falling below the pre-pandemic trend, the labor market remains relatively strong. Why is this occurring? According to a Bloomberg article entitled The Labor Market Confronts the End of Pandemic-Era […]
If you want more evidence that the recent spate of intense volatility was related to the yen carry trade, look no further than last night’s market-calming comments from Bank of Japan Deputy Governor Uchida Shinichi. In fact, in contrast to the process of policy interest rate hikes in Europe and the United States, Japan’s economy […]
The two graphs below tell us the market was petrified on Monday and willing to pay exorbitant prices for hedging protection. Unlike prior downdrafts, fear wasn’t just expressed in sentiment and words but also by remarkable heading action. As we share below, the hedging activity was nearly off the charts. The graph on the left, […]
CLICK HERE for a short video on the state of the markets and yen carry trade. Weak employment data, the simmering Middle East, election jitters, and many other factors are taking the blame for rattling the markets. Those are important issues, but the infamous yen carry trade is the culprit. How do we know? Some […]
This past weekend’s Newsletter discussed how yield curve un-inversions have an excellent track record of predicting recessions. Another historically reliable indicator of recessions is weakness in the corporate credit markets. In mid-July, we highlighted a troubling divergence between the best and worst-rated junk bonds in our Daily Commentary, The Credit Widening In The Coal Mine. […]
As the election nears, investors will become more anxious about how the market may react to each candidate and their campaign promises. Accordingly, we suspect that shifting polls will breed volatility. Moreover, with President Biden dropping out of the race, this presidential election is unique. Below, we share and discuss two charts to help guide […]
While it’s far from guaranteed, a Fed rate cut in September is looking increasingly likely. Wednesday’s FOMC statement changed to reflect a growing concern for the labor markets and less worry about inflation. The opening paragraph below says job gains have moderated, whereas the prior statement said job gains remained strong. They also changed the […]
A SimpleVisor subscriber asked us a poignant question; we think the answer is worth sharing. Simply put, we were asked if we had any hedges in the portfolio and how we might hedge in the future. We currently do not have any shorts or option hedges in place. However, we have trimmed some positions to […]
Yesterday, McDonalds issued a health warning in their earnings announcement. The warning is not about the physical health of its consumers but the customers’ financial health. McDonalds global sales were down 1%, and U.S. sales fell by 0.7% in the second quarter. Moreover, as shown below, its same-store sales have fallen for the first time […]