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Homebuyers Are Paying More For Less
Below our Market Trading Update, we share analysis from the Atlanta Fed showing that housing affordability has been at its worst in the last twenty years. This is unsurprising given that potential homebuyers face the highest mortgage rates in 20+ years. Moreover, they must contend with inflated house prices and little housing supply. The news […]
May 15, 2025
Leverage For Retirement Plans: Is The Risk Appropriate?
Bloomberg recently published, This 30-Year Old’s Startup Is Bringing Leverage To 401K Savers. Their article details Basic Capital, a new startup providing institutional investment strategies to individual 401K and IRA savers. Basic Capital allows clients on its retirement savings platforms to use up to 4x leverage. For each dollar saved, its investors can borrow $4. […]
May 14, 2025
Executive Order On Drug Prices Rattles Healthcare Sector
Despite the weekend’s positive news on China trade negotiations and the associated jump in most stock prices, the healthcare sector was hit hard. The culprit is an executive order aimed at reducing U.S. prescription drug prices. Donald Trump plans to implement a “Most Favored Nation” (MFN) policy. The policy would tie Medicare drug prices to […]
May 13, 2025
Stealth QE Or Routine QT? Unpacking Recent Fed Activity
Tweets like the one we share below allude that the Fed is doing stealth QE, despite the fact that they publicly claim to be conducting QT. Given the importance of the Fed balance sheet, let’s dive into the stealth QE accusation and uncover the facts. The graphic within the Tweet contains the official Treasury Department […]
May 12, 2025
Smart Money Or Dumb Money? Who Will Be Right
The concepts of “smart money” versus “dumb money” refer to the level of investors’ information and experience. Smart money, typically institutional investors and often seasoned professionals, has extensive research and is more adept at data analysis. Therefore, they tend to have more disciplined strategies and are less impacted by negative behavioral traits. Conversely, dumb money, […]
May 9, 2025
Market Is Tepid Over China Developments: Three Conclusions
“BREAKING: Treasury Secretary Scott Bessent says he will meet with Chinese officials in Switzerland to begin trade talks with China.” A month ago, when markets were grossly oversold, news of trade discussions between China and the US would have sent markets soaring. However, now with the market slightly overbought, the S&P 500 doesn’t seem to […]
May 8, 2025
OPEC Does The Unthinkable
This past weekend, OPEC, led by Saudi Arabia, announced it would increase production by 411k barrels per day. The action follows a 250k increase last month. The decision is different from OPEC’s decision-making in the past. OPEC typically would use production quotas to manage oil prices. For example, in the current environment, with oil prices […]
May 7, 2025
PCE Is Quite Confusing
An email from a reader of ours led with the title “PCE is quite confusing.” He asked if we would explain the difference between the monthly PCE prices index and the quarterly PCE prices, i.e., the GDP deflator, accompanying the GDP report. Given the importance of monthly PCE prices to the Fed and their meeting […]
May 6, 2025
Might Japan Be The Treasury’s Knight In Shining Armor?
Japan holds over $1 trillion of US Treasury securities, making it the largest sovereign holder by a significant amount. Thus, the possibility has arisen that Japan might use its extensive holdings as leverage in tariff negotiations. Japanese Foreign Minister Katsunobu Kato said Japan has not made a decision on whether to include its holdings as […]
May 5, 2025
McDonalds And Starbucks Confirm Eroding Sentiment
This past week, two lower-cost food and beverage retailers posted earnings, which conveyed the underlying message that consumers are struggling. McDonalds and Starbucks reported significant domestic sales declines for the first quarter. McDonalds saw its US same-store sales fall by 3.6%, driven by a decrease in its “guest count.” This was the worst decline in […]
May 2, 2025
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