How times have changed? It did not take long for markets’ attention to do a 360 from fears of deflation to that of inflation. January’s consumer price index was reported Wednesday. It was stronger than expected. In the 12 months … Continued
Small-business optimism remains near multi-decade highs. Small-cap stocks do not quite share this optimism. The NFIB optimism index rose two points month-over-month in January to 106.9, just a hair’s breadth away from November’s 107.5, which was a 34-year high. Optimism … Continued
U.S corporate bond issuance slowed down in January, but it is too early to read too much into this. In the first month of the year, corporations issued $109 billion in investment-grade (IG) and $23.2 billion in high-yield (HY) – … Continued
It is a top. But is this the top? All of a sudden, it is not a crazy question to ask. The ferocity by which U.S. equities have dropped in recent sessions, one has to wonder if this marks a … Continued
Following futures positions of non-commercials are as of February 6, 2018. 10-year note: Currently net short 327.5k, up 111.9k. The bond market is worried. Yes, beginning last October the Fed has been curtailing its bloated $4.5-trillion balance sheet. Yes, foreigners’ … Continued
Mediocre demand for Wednesday’s auction of $24 billion in 10-year Treasury notes probably reflects worries over rising deficit spending. In that auction, yields obviously were not attractive enough to entice aggressive buying. Ten-year yields ended the session up eight basis … Continued
Having stopped responding to improving U.S. fundamentals, the US dollar index currently sits at a confluence of technical support. The U.S. economy in recent quarters has put up strong numbers. Real GDP in 4Q17 grew at a seasonally adjusted annual … Continued
Following futures positions of non-commercials are as of January 30, 2018. 10-year note: Currently net short 215.6k, up 97.7k. Last week, the futures-market odds of a 25-basis-point hike in the March (20-21) meeting in the fed funds rate stood at … Continued
U.S. consumers are alive and well. There is both good and bad in this – good now but potentially bad down the road. Consumer spending in December rose 0.4 percent month-over-month to a seasonally adjusted annual rate of $13.7 trillion. … Continued
The U.S. sovereign bond market is in upheaval. So to speak. Ten-year Treasury yields have broken out. Chart 1 is a monthly chart. If in the next couple of sessions, these yields stay north of at least 2.5 percent – … Continued