There is a growing, although not overwhelming, feeling in the markets that the midterm results have raised the odds of a slowdown in the U.S. economy. Arguably, extremely overbought equity markets are beginning to buy into this thesis, although faintly … Continued
As expected, the fed funds rate was left unchanged last week, and futures traders, post-FOMC meeting, unexpectedly lowered the number of quarter-point cuts through December 2027 to two from three pre-meeting. It is possible they are anticipating tighter financial conditions … Continued
As rates are expected to be left unchanged in this week’s FOMC meeting, inflation expectations for next year have firmed up a tad. Rates on the long end of the curve are near crucial support after reaching multi-year highs, even … Continued
Large-cap bulls last week squandered an opportunity to leave a decisive mark on the S&P 500 and Nasdaq 100. Those chances instead went begging, leaving the door open for the bears to inflict more pain. Going into last week, the … Continued
The Fed raised rates for the first time in just over three years. Equities are acting as if it is one, or two, and done. But futures traders are pricing in three more hikes by December next year. The major … Continued
Major equity indices essentially went sideways last week, and interest rates firmed up. August fared very well in job creation, and this probably puts the FOMC under pressure to tighten monetary policy, provided of course this Friday’s CPI report plays … Continued
An interest-rate hike next month is looking like a certainty. Warsh’s hawkish posture on inflation, which has remained above the Fed’s target for more than five years, comes at a time when corporate profit growth is at an unsustainable level. … Continued
With more than three-fifths of S&P 500 companies having reported June-quarter results, investor attention is likely to gradually shift elsewhere looking for catalysts. This void likely gets filled by the Fed and the rejuvenated debate around inflation in the weeks … Continued
Prospects for higher short rates are kind of taking a toll on equity indices that until recently were pricing in monetary easing this year. The elevated investor optimism has taken a hit but is nowhere near done in the big … Continued
Post-FOMC statement last Wednesday, equities sold off, but only to recover quickly. Investors have been preconditioned to buy the dips, with repeated success. The difference this time is that prospects for higher rates are real. Federal Reserve Chairman Kevin Warsh … Continued