Following Wednesday’s Fed meeting, ZeroHedge aptly titled an article, “Santa Powell Unleashes Global ‘Buy Everything” Frenzy As Dollar, Yield Tumble.” Stocks and Bonds surged higher as the Fed was much more dovish than expected. Like Paavolov’s dogs, investors latched onto the prospect of rate cuts in 2024 and bought stocks and bonds without asking essential […]
The Fed’s pause since the last rate increase is five months old. To help appreciate the tightrope the Fed walks between recession and inflation, we closely follow Fed communications and appreciate history. At yesterday’s FOMC meeting, Jerome Powell used the balance of risks between inflation and recession as the justification for the pause of rate […]
The Nasdaq rebalanced its holdings as expected yesterday. However, investors were not expecting the NASDAQ to reduce the contributions of the Magnificent 7 (AAPL, MSFT, TSLA, GOOG, NVDA, AMZN, and META) and, in the aggregate, raise the contribution of the remaining 93 stocks. The heat map below shows that each Magnificent 7 stock was red. […]
The US now accounts for the most oil production in the world. Importantly, as we share in the graph below courtesy of Axios, the ramp-up of US oil production since 2020 has helped offset recent supply reductions by Russia and Saudi Arabia. Oil production troughed in 2020 as the pandemic crushed demand and limited production. […]
The Fed offers banks and money market funds reverse repurchase agreements (RRP) to drain excess liquidity in the money markets, allowing them to manage the Fed Funds rate. RRP are collateralized overnight loans made by banks and money market funds to the Fed. In March 2021, RRP balances surged due to the excessive liquidity caused […]
JP Morgan CEO Jamie Dimon testified to Congress on Wednesday in a routine meeting about the banking industry. In the process, the topic of Bitcoin and other cryptocurrencies came up. Despite having significant investments in blockchain, Dimon had some choice words for Bitcoin and other cryptocurrencies. In particular, the following quote is making headlines: “If […]
The ADP jobs report came in at 103k versus the expected 130k. The ADP also revised the jobs count from October to 106k from 113k. Over the last three months, the average gain has been just under 100k. Unlike the BLS, which surveys companies about their employment activity, ADP uses actual payroll data, including more […]
The Economist published an article entitled Is It Cheaper To Rent Or Buy Property? It shows how the financial decision of buying versus renting has drastically changed due to the fiscal and monetary response to the pandemic. With massive stimulus came inflation and higher mortgage rates. Typically, higher mortgage rates result in lower home prices. […]
Per the Tweet of the Day, our SimpleVisor relative analysis tool suddenly shows the real estate sector is the most overbought sector. For the better part of the year, real estate and many other sectors grossly lagged behind the technology and communications sectors. As we approach year end, the tide is turning. The graph below […]