Rising Rates To Reverberate Through Consumer Delinquency Rate At Some Point

posted in: Credit, Economy | 0

Within a year, US interest rates have gone up a lot, with the fed funds rate having risen from zero-bound to north of 4.5 percent currently. In the futures market, traders expect the benchmark rates to peak between 550 basis … Continued

Earnings Season Set To Begin This Week – Post-Earnings Reaction Key, With Large-Cap Multiples Increasingly Set To Act As Headwind

posted in: Economy, Equities | 0

The 3Q earnings season begins in earnest this week. Leading up to this, the revision trend is up and stocks have come under a little pressure. Post-earnings reaction likely gets influenced by several variables, not the least of which is … Continued

Fed Increasingly Eyeing New Stimulus Tools, Stocks’ Reaction Function Key

posted in: Credit, Economy, Equities, Technicals | 0

US reliance on debt is growing.  Having already just about used up the conventional monetary tool and a massive balance sheet, the Fed is looking for new tools – a la Japan.  Stocks’ reaction function to Japanification is key. At … Continued

Rates Diverge With Equities – TLT Pushes Through Aug ’19 Falling Trendline

posted in: Credit, Derivatives, Economy, Technicals | 0

The year is quite young, but things have not quite turned out the way bond bears were hoping they would.  The 10-year T-yield last week pierced through trend-line support from last September.  In due course, this likely opens the door … Continued

Too Much Of A Good Thing Not Always Good

posted in: Credit, Economy, Equities | 0

The post-Great Recession recovery has been uneven.  Jobs have been one of the bright spots.  In the dying months of last year, job openings – both non-farm and small-business – weakened.  It is too early to declare a trend has … Continued

Despite Record S&P 500 Dividends, Yield Stagnant But Better Than 10-Year T-Yield

posted in: Credit, Economy, Equities | 0

S&P 500 companies are doling out record dividends.  Because the index has rallied massively, the dividend yield continues to linger around two percent.  This is still better than what the long end of the sovereign bond market is yielding, helping … Continued

Amidst Mixed Macro Signals Plus Other Divergences, New Highs In Major US Equity Indices

posted in: Commodities, Credit, Economy, Equities | 0

Amidst mixed signals in the economy and divergences with the bond market and crucial metals, among others, US stocks continue to rally to new highs. US inventories are building – again. In October, manufacturing and trade inventories rose 0.2 percent … Continued

FOMC Likely To Soften Tone/Language, Watch Out If Stocks Cannot Rally On This

The FOMC meets this week.  A 25-basis-point hike is expected, so is a shift to a dovish bias.  Watch out if stocks, beaten up the past two and a half months, cannot rally on this, and/or shorts quickly show up … Continued

Markets’ Focus Shifts To Rising Inflation And Inflation Expectations – Would Fed’s?

posted in: Credit, Economy | 0

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

Spread Between S&P 500 Dividend Yield And 10-Year Yields Can Potentially Hurt Stocks If Rates Rise Under Proposed Tax Regime

posted in: Equities | 0

The spread between the dividend yield of S&P 500 companies and 10-year Treasury yields has gone negative the last four quarters, albeit not by much.  This could exacerbate if – big IF – the White House’s proposed tax cuts pass … Continued