One of the perplexing things in the current economic cycle has been the suppressed velocity of money. Six years into recovery, velocity has yet to pick up steam. As the chart below shows, excess reserves have gone toe-to-toe with the … Continued
3Q14 GDP numbers revive – once again – hopes of surge in business capX Collapse in November y/y growth in orders for non-defense capital goods ex-aircraft With energy accounting for nearly 1/3rd of S&P 500 capX, capX bulls will have … Continued
Dollar continues to act well technically, amid signs of overcrowded trade U.S. exports’ share of GDP near all-time highs, means higher risk/reward to economy Strong greenback has not resulted in higher current account deficit last three years, a trend to … Continued
Despite escape-velocity meme, yield curve continues to tighten Message of belly/long end of curve to short-end: be careful what you ask for Financials diverge from 10-2 spread, perhaps setting up as shorting opportunity next month One of the contrarian themes … Continued
On a day when we are enjoying the blockbuster 3Q GDP numbers comes another data point that points to continued sluggishness in U.S. housing. Yesterday, existing home sales disappointed. Sales were lowest since May this year. I even heard one … Continued
10-year notes yielding lower vs when Nov’s blockbuster jobs report came out Large speculators’ net shorts in 10-year-note futures at four-plus-year high Bond vigilantes not buying hopes and prayers of escape-velocity backers Treasury bonds continue to catch a bid. A … Continued
Markit forecast of sub-200k private payroll growth this month a surprise U.S. unemployment claims, near historical lows, need catalyst to begin to move up Oil-heavy states are yet to see jobs impact of drop in crude, but only a matter … Continued
Market expectations for rate hike next year runs risk of disappointment With monetary quiver nearly empty, Fed very much focused on wealth effect Job even more difficult, given adverse effects of cheap money beginning to loom Markets are sending mixed … Continued
U.S. capacity utilization inched up 0.8 percentage point month-over-month in November. The 80.1 reading is the highest since 80.3 in March 2008. It is inching ever closer to the four-decade-plus average of 80.6 (going back all the way to January … Continued
Soft fundamentals, but gold continues to hold up well Large speculators added further to their net longs in gold futures Overbought near-term, but potential weakness likely gets bought near support Trend followers do what they do best. Large speculators are … Continued