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 rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.” […]
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 COVID pandemic. Peter’s commentary is undoubtedly concerning. However, if you examine the CFNAI data […]
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. Furthermore, they expound on their economic views and the economic data points most likely to […]
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 you left a month ago. What you missed was an extreme spike in implied volatility […]
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 campaign says the price gouging measure sets “clear rules of the road to make clear […]
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 highlight with circles, it’s worth noting that short-term trend changes in crude oil prices have […]
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 trading 8% higher on the news. Most retail earnings this year have been accompanied by […]
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 a 25bps ease at the September meeting, as Nick Timiraos states in today’s Tweet of […]
The Wall Street Journal shared an interesting investment strategy that Research Affiliates (RA) championed in its article, Wall Street’s Trash Contains Buried Treasure. Going by the index name NIXT, the strategy is designed to focus on a market inefficiency resulting from the overwhelming popularity of passive investment strategies. The NIXT index is simple: it buys […]