PRO COMMENTARY

At last week’s FOMC meeting, Jerome Powell clearly stated that recent signs of labor market weakness were an important factor in cutting rates. Therefore, assuming inflation continues to decline, the strength or weakness of the labor market will likely determine […]

“The Fed will spur another round of inflation with rate cuts.” That line and similar sentiments have been plastered all over social media following the Fed’s aggressive 50 bps rate cut. Given the importance of inflation on asset returns, it […]

With a staff of over 400 economic Ph.D.s and seasoned leadership, many believe the Fed has a firm grasp on future economic and inflation trends. Accordingly, they must have a good idea of what the future holds for interest rates. […]

We’ve previously written that electricity demand is projected to outpace capacity over the next decade. The 20-year power purchase agreement signed between Microsoft and Constellation Energy, announced last Friday, highlights the potential for nuclear energy to meet the surging power […]

The federal government’s fiscal year ends on September 30, and with it, a budget extension is needed to keep the government running beyond that date. Accordingly, as seems to be the norm, government dysfunction is back on full display. House […]

On Wednesday, the Fed embarked on an easing campaign with a somewhat surprising 50 bps cut in the Fed Funds rate. The shift toward an easy money policy follows a 2.5-year tight monetary policy regime. 11 members voted for the […]

The VIX Index, often called the “fear gauge,” measures implied market volatility based on S&P 500 put and call options. Most often, the VIX rises when the stock market declines as investors tend to be willing to pay a higher […]

As we share below, the market is betting on a 50 bps Fed rate cut at tomorrow’s FOMC meeting. Given tame inflation and labor data, the question is why there is a sudden change in expectations. Might the Fed think […]

Despite improving investor sentiment as the markets approach all-time highs, recent price action in the yen and Fed Funds futures warns that it may be too early to think the recent volatility is over. Let’s start with the yen and […]

As we share in the graph below, crude oil prices peaked at $95 a barrel a year ago. More recently, in July, they were as high as $85. Today, they are below $70 and threatening to take out long-term support. […]

The Adobe Digital Price Index claims to use data from over one trillion online consumer transactions comprising over 100 million unique product SKUs. While those are massive numbers, Statista estimates only 16% of retail sales will come from online transactions […]

Yesterday’s commentary answered a question from a reader about our thoughts on owning gold or gold miners during a bull steepening period. Hours after publishing the commentary, we got a similar question asking how bitcoin might do when the Fed […]

This past weekend, we received this question from a reader. The question is in reference to our recent article, Bull Steepener is Bearish. Specifically, the article points out that historically, stocks tend to do poorly when the yield curve exhibits […]

Heading into last Friday’s BLS employment report, the Fed Funds futures market put equal odds of the Fed cutting by 25 bps or 50 bps. Most economists thought the employment report would answer the question of whether they will cut […]

A week ago, the BLS revised lower the number of employed persons by nearly 900,000. Given that revision and a slew of recent revisions in other economic statistics, we must ask if GDP is also overstated. GDP, like other data, […]

Nvidia faces legal woes as the Justice Department subpoenaed the company over antitrust concerns. This should not be too surprising, as it was recently reported that Nvidia dominates the GPU chip market and continues to increase its market share. GPU, […]

“The level of U.S. Treasury yields and the changing shape of the Treasury yield curve provide investors with critical feedback regarding the market’s expectations for economic growth, inflation, and monetary policy.” That sentence led off our article last week: Yield […]

Like the meteorological seasons, share buybacks also follow predictable patterns. Accordingly, as shown below, we are past the peak share buyback season. Following the peak, share buybacks will decline rapidly until early November. Declining share buybacks is not a bearish […]

At many quarter ends, the markets often exhibit unusual behavior. Moreover, the oddities leading up to quarter ends are frequently partially or fully reversed in the days following the quarter. The irregular activity is in part due to window dressing. […]

The graph below shows the MBA average 30-year mortgage rate, with its year-over-year change below. The good news is that mortgage rates have recently fallen rapidly. However, they remain well above rates seen since 2008. This creates a problem for […]

Recent surveys of labor sentiment point to potential problems. For instance, last week, we shared the New York Fed consumer expectations survey, which showed that more people fear being unemployed in the next four months than at any time since […]

Amazon CEO Andy Jassy has been touting the benefits his company receives from AI. In particular, he recently discussed Amazon Q, their “GenAI assistant for software development.” GenAI updates its foundational software. Per Jassey, this task is essential but dreaded […]

On Friday, Jerome Powell signaled that a September rate cut is highly likely, and the stock and bond markets applauded. “The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of […]

Peter Schiff tweeted the following in regards to the Chicago Fed National Activity Index (CFNAI): The July Chicago Fed National Activity Index ‘unexpectedly’ plunged to minus 0.34, its lowest since April 2020, when the economy was initially shut down by […]

The Fed’s annual symposium in Jackson Hole, Wyoming, kicking off yesterday, will keep traders on edge over the next few days. The Fed often uses the Jackson Hole meeting to elaborate on its expected policy path for the months ahead. […]

If you went off the grid for the last month and are just returning, you may think you missed a typical boring August. The S&P 500 is within 2% of its July 15 high, and volatility is low, as when […]

Recently, Kamala Harris proposed that if elected, she would implement a ban on price gouging for food and groceries. Her goal is to lower inflation, as food prices have risen by about 20% over the last four years. The Harris […]

Over the last year or so, crude oil and ten-year U.S. Treasury bond yields have been highly correlated. The graph on the left shows how oil and bond yields have moved step for step with each other. However, as we […]

Walmart’s earnings report gives investors hope that weakening retail spending trends may be ending. Walmart’s earnings and sales exceeded expectations. Furthermore, Walmart gave increased earnings guidance for the year ahead. Investors loved the news, as witnessed by Walmart shares initially […]

Unlike yesterday’s cooler-than-expected PPI report, CPI was right on the screws. As expected, CPI and CPI core rose 0.2% for the month. On a year-over-year basis, they run 2.9% and 3.2%, respectively. The data pretty much locked the Fed into […]