Tesla (TSLA) shares jumped 10% on Monday, gaining over $50 billion in market cap in one day. For perspective, Ford has a market cap of $48 billion. Fueling investor optimism was a Morgan Stanley research report upgrading Tesla’s share price to $400. Such is a nearly 50% increase over where TSLA shares currently trade. In […]
Three Fed branches put out economic forecasts of economic activity throughout the current quarter. These Fed GDP forecasts are called Nowcasts because the Fed branches use current economic data points and not estimates of future data to quantify how GDP is running. The Fed GDP NowCasts tend to be volatile as data and data revisions […]
The FDIC graph shows that banks are sitting on over $500 billion of losses on their investment securities. This doesn’t include bank loans and other assets with significant unrealized losses. The graph may look scary, but thanks to a rule passed during the financial crisis, it may not be. In 2008, banks were taking tremendous […]
Our Daily Commentary from August 25 summarizes a SimpleVisor stock scan, highlighting companies with high sales exposure to China. The article states: “Once again, trade tensions are heating up with China as President Biden signed an executive order to limit U.S. investments in Chinese technology companies for national security concerns. China says a response is […]
The top graph below charts stock prices and bond yields. The smaller graph below shows the rolling ten-day correlation of stocks (SPY) and bond yields (10-yr UST). The higher the correlation, the stronger the relationship between stock prices and bond yields. Conversely, the weaker the correlation, the more stocks and bond yields move in opposite […]
Three months ago, Congress and the President avoided a shutdown and default on government debt when they agreed to increase the Treasury’s spending cap. Unbeknownst to many, another potential government shutdown may come in less than a month. Lawmakers need to agree on the fiscal budget for 2024, which starts on October 1, 2023. A […]
Starting last Friday, interest began accruing on student loans, and on October 1, payments will be due. Over three years ago, the CARES Act allowed student loan forbearance until September 2020. It was ultimately extended multiple times. As payments begin, the weight of student loan payments will dampen consumption and economic activity. The question is- […]
Gross Domestic Product (GDP) and Gross Domestic Income (GDI) are two very similar measures of economic activity. The difference is that GDP measures output, while GDI assesses income. In both theory and history, these two measures should tell the same economic story. Historically, GDI has proven to be more reliable but is less followed as […]
Tuesday’s JOLTS report and Wednesday’s ADP point to a sudden weakening of the labor markets. The JOLTS report (Job Openings and Labor Turnover Survey) produced by the BLS showed the number of job openings fell by 338k to 8.8 million. As shown below, job openings are falling almost as rapidly as they rose in 2020 […]