CPI Was On The Screws: The Fed Has The Green Light
Yesterday’s CPI report was seemingly the last hurdle for the Fed to cut interest rates. With the CPI index matching Wall Street forecasts, the Fed Funds futures market now implies a 97% chance the Fed will cut rates next Wednesday. […]
China Is No Longer The Marginal Buyer Of Oil
From 2010 through 2022, the US Energy Information Administration (EIA) calculates that global oil demand grew by 10 million barrels per day (Mb/d). Over 60% of the demand growth was due to China’s phenomenal economic growth. For context, American demand […]
What Are Material Stocks Telling Us?
Material stocks have been one of the worst-performing sectors this year, lagging the S&P 500 by nearly 20%. Since the election, its relative performance versus the market has continued to worsen. Therefore, given the historical correlation between the economy and […]
Housing Affordability Brings Market To A Standstill
Housing affordability helps explain why residential real estate transactions have reached a standstill. Over the last five years, housing prices have surged. Per the Case-Shiller 20 City Home Price Index, home prices from 20 of the largest cities have risen […]
100k Bitcoin
Turn on CNBC, and you will notice a bright green box permanently affixed to the bottom right corner with the ever-changing price of Bitcoin. Bitcoin is all the rage as market speculation across crypto and other assets is robust. Moreover, […]
Lilly Tops Nordisk In Weightloss Battle
The two market-leading weight loss/obesity drugs (GLP-1), Zepabound (Eli Lilly) and Wegovy (Novo Nordisk), just completed a clinical side-by-side trial. After 72 weeks of testing on 750 obese or overweight adults with at least one medical problem, Eli Lilly came […]
The Dollar And Oil Foresee A Santa Rally For Bonds
Bond yields are primarily driven by macroeconomic factors such as inflation and economic growth. Given their impact on inflation and the economy, the U.S. dollar and oil prices are frequently well correlated with bond yields. Therefore, bond traders often take […]
In Store Sales Falter Despite A Good Black Friday
Based on early Black Friday sales estimates, sales were strong, but shoppers were much more inclined to take advantage of online sales than go to the malls and stores in person. Mastercard SpendingPulse estimates that in store sales only grew […]
New Home Sales And Home Prices Argue For Another Cut
New home sales fell by 17.30% in October, marking the most significant monthly decline in ten years, as shown in the graph on the left below. Furthermore, the supply of new homes on the market rose from 7.7 to 9.5 […]
Leverage And Speculation: Signs Of A Raging Bull Market
In a recent Commentary- MicroStrategy Is A Leveraged ETF In Disguise – we discussed the company’s business model, which revolves almost entirely around highly speculative bitcoin and leverage. To wit: So, what is MicroStrategy? It’s a leveraged Bitcoin fund disguised […]
The 3-3-3 Rule
Donald Trump nominated seasoned hedge fund manager Scott Bessent as the next Treasury Secretary. While the Treasury Secretary has many responsibilities, debt management is one of the most important. Therefore, given the recent scrutiny the bond market has been paying […]
Bitcoin Is Entering Volatility Season
Since the election, Bitcoin has risen nearly 50%. While Bitcoin investors are licking their chops, believing the magnificent rally will continue, they need to realize that Bitcoin is entering a period of pronounced seasonal volatility. The graph below from Sentimentrader […]
AI Is Steaming To Nvidia’s Benefit
Wall Street’s poster child for AI is Nvidia. With an overwhelming market share in AI chip design, Nvidia is up over 200% year to date and a whopping 2680% over the last five years. Driving the price surge are incredible […]
Target And Walmart: Same Business But Different Trends
Yesterday’s Commentary shared Walmart’s outstanding earnings report and reviewed its surging share price from a technical basis. Despite being a head-to-head competitor of Walmart, Target is heading down a completely different path. Walmart beat EPS and revenue expectations easily, while […]
Walmart Shares: Great Fundamentals But At A Frothy Price
Walmart’s (WMT) shares opened higher as its earnings report surpassed expectations. EPS and revenues beat expectations. Moreover, the company increased its sales guidance for next year by a full percent. As its latest earnings report reminded us, Walmart is doing […]
Gold Miners Enter The Bears Den
Many investors consider a decline of 20% or more to be a bear market. We can debate the merit of the random 20% figure, but according to that definition, gold miners, down 25% from its peak on October 22, are […]
5X5 Inflation Expectations: A New Benchmark To Follow
At the last FOMC meeting, Jerome Powell was asked if they were concerned that inflation expectations are “de-anchoring, or put another way, are anchoring at a slightly higher level?” His answer specifically referenced the 5×5 forward inflation expected rate. He […]
2% CPI Is Here
2% CPI is a headline you won’t find in today’s Wall Street Journal. The reason is that official inflation gauges, such as CPI, are in the mid to upper 2% range. Last Wednesday, for instance, the year-over-year CPI rate clocked […]
Seeking Beta
While the “Trump rally” appears to have just begun, one of its initial hallmarks is that investors want beta. Beta is a measure of the volatility of a stock versus the broader market, most often the S&P 500. For instance, […]
Crypto Soars
On the campaign trail, Donald Trump favored the crypto industry, including appointing “crypto-friendly” regulators. Moreover, one of the plans he mentioned several times was the creation of a federal strategic reserve of crypto assets. Trump’s decisive victory, along with the […]
Super Micro Is Not So Super Anymore
Super Micro Computer Inc. (SMCI) was the market’s darling only six months ago. Amazingly, Its stock, had risen 3x in just the first three months of 2024. Consequently, S&P Global announced its addition to the S&P 500 Index. The announcement […]
As Expected The Fed Cut Rates
As expected yesterday, the Fed cut the Fed Funds rate. With the expected 25bps rate cut, the new range for Fed Funds is 4.50-4.75%. The redlined second paragraph below, regarding inflation, is the only meaningful change to the FOMC statement. […]
A Second Trump Term Stokes The Inflation Narrative
After Tuesday night’s initial election results started to point to increasing odds of a Trump victory, bond yields began to rise sharply, as shown below. The surge in rates was not a sudden move. Over the past month, betting odds […]
De-dollarization Or Re-dollarization?
Some gold and Bitcoin bugs claim the U.S. dollar is being inflated away and that our politicians and the Fed are abusing its status as the world’s reserve currency. While the narrative may sound logical, the fact of the matter […]
Residential Construction Jobs At Risk
The number of residential construction workers has almost doubled since the aftermath of the financial crisis and housing bust. The graph below on the left shows that after a brief hiccup during the early days of the pandemic, the number […]
Market Polls To Help Handicap The Election
With election eve upon us, we thought it would be helpful to share market based presidential election polls along with Greg Valliere’s final thoughts. The graph on the top left shows the price of Trump Media & Technology Group (DJT), […]
PCE Price Index Is Back Into The Pre-Pandemic Range
It’s too early for the Fed to claim the infamous “mission accomplished” for inflation. However, yesterday’s PCE price index is now within the Fed’s mission accomplished range. The PCE price gauge rose 0.2% monthly and 2.1% year over year. That […]
Will Halloween Fear Bring November Cheer For Bondholders?
The last two Halloweens capped off a few frightful months for bondholders. However, as we share below, 10-year bond yields reversed course on Halloween in 2022 and 2023. Will 2024’s harrowing October for bondholders end with Halloween’s ghosts and goblins? […]
Market Turbulence Ahead: Buckle Up
Many events could roil the markets over the next two weeks and/or send them surging. Accordingly, it’s worth summarizing the political, monetary, and economic schedule to prepare for market turbulence. The intense schedule kicked off yesterday with the JOLTs report […]
Continuing Jobless Claims Diverge From Initial Claims
Along with this week’s BLS, JOLTs, and ADP labor market reports are the weekly initial and continuing jobless claims data from the BLS. While the market doesn’t seem to focus on the continuing and initial jobless claims data as much […]