In mid-August, the price of natural gas peaked at $9.33. Forecasts for a cold winter here and in Europe and the Russian-Urkranian conflict led many to foresee natural gas shortages. The winter was generally milder than expected, and supply lines continued to normalize, driving the price of natural gas precipitously lower. Natural gas is around […]
These days the financial media spends a lot of effort linking the Fed’s future actions with the direction of stocks. The rally since last fall is primarily based on hopes for a Fed pivot. Conversely, the recent decline is blamed on higher Fed Funds for longer. Looking beyond the Fed are two crucial factors in […]
As we share in a section below, it is becoming more evident the Fed intends to raise the Fed Funds rate higher than expected and keep it there longer than the market’s expectations. A result of the Fed’s renewed commitment to higher for longer, is dollar strength. Higher Fed Funds and higher yields across the […]
Bitcoin and other cryptocurrencies rose over 10% on Wednesday. Per the graph below, Bitcoin, the most followed crypto, is up nearly 50% this year. Why the resurgence? There are a couple of factors that come to mind. For starters, investors in 2023 are favoring last year’s losing assets. Our Commentary from Tuesday, Meme Stocks for […]
6-month and 1-year Treasury bills yields are above 5 percent, marking the first time a Treasury yield was over 5% since 2006. Savers are enthused at the prospect of earning a historically excellent risk-free return. On the other side of the coin are stock investors. Their decision-making is becoming more complex. Are they willing to […]
The hot January CPI report bolsters the Fed’s view that inflation will not fall as rapidly as they prefer. Despite what may appear to be a slight setback, the downward trend remains intact. Year-over-year CPI is down seven consecutive months to the lowest level since October 2021. While the trend is assuring, January’s monthly data […]
The scatter plot below compares various stock factor returns for 2022 and 2023, year to date. The winner this year by a long shot is last year’s loser, Meme stocks. In 2022, Meme stocks were the second worst performing factor, giving up approximately 60%. Meme stocks and last year’s other worst performing stocks are predominantely […]
In our Commentary 2023 Challenge: Contradiction, we discussed Lance’s recent article, The Technicals Vs. The Fundamentals. Specifically, the two pieces aim to raise awareness that technical studies are a reason for bullishness, while fundamentals tend to argue a bearish case. As if the divergence between technicals and fundamentals was not enough to grapple with, there […]
Wednesday’s 10-year Treasury auction was met with solid demand. More interestingly, the demand is not coming from the Fed’s 25 primary dealers. The number of bids in the auction outweighed the number of bonds being auctioned by 2.66x. The six-month average is 2.39x. Further, the yield on the auctioned bonds was 3bps below where the […]