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 by 25 bps or 50 bps at the September 18th FOMC meeting. The BLS employment […]
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, has a history of sharp revisions. For instance, consider the following research from the San […]
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, or graphics processing unit, is a cornerstone of AI technology. As shown below, as of […]
“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 Curve Shifts Offer Signals For Stockholders. The Treasury yield curve has proven an accurate predictor […]
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 indicator per se. However, as the number of buybacks declines, the market, and specifically the […]
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. Mutual funds are only required to share their holdings with investors quarterly. As such, they […]
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 the Fed. Over the last twenty years, there has been a strong correlation between mortgage […]
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 2014. Furthermore, the University of Michigan survey section regarding expected changes in household income is […]
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 by its employees. GenAI takes some of the onus off developers, allowing them to use […]