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 Speaker Mike Johnson failed to pass a budget extension bill on Wednesday. Moreover, he doesn’t […]
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 rate cut, with one member dissenting. The dissent was the first dissent in almost 20 […]
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 premium for option hedges. Conversely, the VIX falls or hovers at very low levels as […]
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 the labor market is weakening more substantially than the market? Moreover, deflation could be a […]
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 what it has done since wreaking havoc on the markets in early August. The graph […]
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. So, why are oil prices falling so rapidly? We lean on the International Energy Agency […]
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 in 2024. Despite the relatively small percentage, over 75% of adults shop online, and over […]
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 cuts rates. If bitcoin trades as a proxy of monetary policy and the dollar’s viability, […]
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 a bullish steepening. However, gold miners and gold have both averaged positive returns during such […]