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Labor Report Sends Yields Lower
The October labor report, released Friday, indicated slowing job growth in the US last month. The economy added 150k jobs in October versus a consensus estimate of 180k. A sharp decline from the 297k jobs added in September, and although the media is touting a “goldilocks labor report,” the numbers are more concerning under the […]
Nov 6, 2023
War Is Being Discounted As Recession Concerns Return
Almost a month ago, on October 7th, Hamas attacked Israel, and concerns of a much larger war in the Middle East spiked. War worries weighed on stock prices and irked the bond markets. With a few weeks to better assess the war situation and the many possibilities, the markets seem less worried. To wit, the […]
Nov 3, 2023
Chairman Powell And The Fed Likely Enter A Long Pause
In the November FOMC statement, Chairman Powell and his colleagues at the Fed did as the market expected. Not surprisingly, in a unanimous decision, they left the Fed Funds rate at 5.25-5.50% and made minimal changes to the statement from the prior meeting, as shown below. The Fed continues to threaten another rate hike but, […]
Nov 2, 2023
The BOJ Is Relaxing YCC. Why You Should Care.
The Bank of Japan’s (BOJ) policy meeting on Tuesday resulted in a shift away from yield curve control (YCC). Per the BOJ: “With extremely high uncertainties surrounding economies and financial markets at home and abroad, the Bank judges that it is appropriate to increase the flexibility in the conduct of yield curve control so that […]
Nov 1, 2023
Cheap Money Keeps The World Spinning
The growth of the global economy and the value of the world’s financial assets are a function of interest rates. Interest rates are the cost of money. The cheaper money gets, the more investments into all sorts of assets make sense. Politicians and central bankers clearly understand this relationship. As we have seen since the […]
Oct 20, 2023
False Narratives Weigh On The Bond Market
False narratives are stories market pundits tell to justify market actions. Sometimes, they are factual. Oftentimes, legitimate-sounding false narratives are incorrect. Yesterday’s Commentary took bond market false narratives to task. Specifically, one which claims foreign debt holders, specifically China and Japan, are selling sizeable amounts of U.S. Treasury bonds, which forces Treasury yields higher. We […]
Oct 12, 2023
The NFIB Small Business Optimism Index Remains Pessimistic
The September NFIB Small Business Optimism Index (blue) fell to 90.8 from 91.3, remaining near the lowest levels since the financial crisis. The forward-looking NFIB business outlook (orange) dropped to -43. Such is above the low registered in mid-2022 but below levels reached during the financial crisis. 23% of small business owners deem inflation as […]
Oct 11, 2023
Coke And Pepsi Fall Victim To Ozempic
Shares of Coke and Pepsi were down about 5% on Thursday and trending lower as Ozempic and other obesity drugs become popular. Unfortunately for Coke, Pepsi, Mcdonald’s, and other companies, users claim they eat less food. Walmart confirmed initial reactions, saying its customers taking Ozempic and other appetite-suppressing drugs are purchasing less food. Drugs like […]
Oct 9, 2023
The FTC Problem at Amazon
Amazon is facing an existing FTC problem that escalated last week. On Tuesday, the Federal Trade Commission and 17 state attorney generals filed a lawsuit against Amazon for anti-competitive practices in its online marketplace. According to the press release, The complaint alleges that Amazon violates the law not because it is big, but because it engages in […]
Oct 2, 2023
The Yield Curve Nears A Golden Cross
The Treasury bond yield curve has a near-perfect track record for predicting recessions. Inverted yield curves, when the yields on short-maturity bonds are greater than long-maturity bonds, are precursors to recessions. Yield curve inversions, however, are poor timing tools. The last four recessions started after an inverted yield curve un-inverted back to its normal positive […]
Sep 25, 2023
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