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The Fed Is Losing Its Biggest Dove
Jerome Powell’s term as Fed Chairman expires this Friday, with Kevin Warsh now confirmed by the Senate as his successor. The transition has implications beyond a change in the Fed’s leadership. Further, Stephen Miran, who was appointed Fed Governor in September 2025 to fill the vacancy left by Adriana Kugler, is seeing his term come […]
May 15, 2026
China Trade Summit: Deal Or Delay?
Investors are optimistic that the Wednesday kickoff of the US-China trade summit, featuring President Trump and Chinese President Xi Jinping in Beijing, will result in a durable deal. The current hope is for an agreement currently labeled as a “Board of Trade” framework. Such a pact would create a trade mechanism in which each side […]
May 14, 2026
Fast Food Falters
Since the start of 2024, McDonald’s (MCD) stock has fallen 7% while the S&P 500 has risen over 50%. More recently, since the start of hostilities with Iran, MCD is down nearly 20% while the broader market recovered initial losses and rallied to record highs. It’s not just fast food giant MCD trading poorly. Many […]
May 13, 2026
Bonds Under Pressure Or Stocks Overvalued?
We recently read someone’s take that the graph below decisively points to the “bond market being under serious pressure.” The graph, courtesy of Bloomberg, shows that the yield on the ten-year US Treasury note is about 1% more than the earnings yield on the S&P 500. The S&P 500 earnings yield is calculated by dividing […]
May 12, 2026
Hammack: More Pragmatist Then Hawk
At the April 29th FOMC meeting, Cleveland Fed President Beth Hammack and two others (Logan and Kashkari) dissented. Unlike most dissents historically, the objection wasn’t about whether to change the Fed Funds rate; it was about the language in the FOMC policy statement. She specifically took issue with the wording: ” In considering the extent […]
May 11, 2026
Temporary Jobs: A Good Leading Indicator Gone Bad?
When businesses have concerns about the economy, they often lay off or stop hiring temporary workers before firing full-time employees. For that reason, temporary staffing employment has been a reliable early warning signal of labor market weakness and recessions. As we share below, declines in temporary help services employment preceded the last three recessions by […]
May 8, 2026
Oil Rig Counts Don’t Tell The Whole Story
The graph below shows that the US oil rig count has been slightly declining despite much higher oil prices. While many investors may assume that no growth in the number of operating oil rigs implies limited oil production growth, that assumption is not necessarily true. To wit, we share Diamondback Energy’s May 2026 stockholder letter. […]
May 7, 2026
Nicoletos: AI Makes A Case For Active Strategies
Michael Nicoletos wrote a thoughtful paper titled “The Index Trap,” making a compelling case that active investing, i.e., picking individual stocks versus buying baskets of stocks (ETFs), will outperform in the future. If correct, that would reverse the trend over the last two decades, in which investors increasingly relied on passive investment strategies. The following […]
May 6, 2026
Does The Treasury Hold The Next Market Tailwind?
The Treasury General Account (TGA) is effectively the US Treasury’s checking account held at the Fed. The changing balance of the TGA affects the financial system’s liquidity, thereby influencing broader economic and market activity. For example, when the Treasury raises its TGA balances by issuing more debt and or collecting more tax revenue than it […]
May 5, 2026
NVDA To CPU Rotation: Durable Thesis Or Crowded Trade?
The semiconductor leaderboard has quietly flipped over the past month, and the NVDA to CPU rotation is worth pausing on. NVDA, the name that defined the AI trade for two-plus years, is up just 13.4% over the trailing month. The CPU cohort has run circles around it. AMD has ripped 70.4% higher, MU has added […]
May 4, 2026
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