US consumer spending is holding up, even as manufacturing is under tremendous pressure. Consumers have been dipping into savings owed to loads of government stimulus post-Covid. Bank deposits remain healthy but at the same time the rate of change year-over-year … Continued
Last Friday’s PCE report forced markets to reprice risk assets. Stocks dropped but at the same time closed significantly higher off sessions lows. Near-term, equities can rally – if nothing else just to unwind the daily oversold conditions. As the … Continued
The fed funds rate has gone up more than 450 basis points since last March, and more tightening is on the way. This is yet to sufficiently make a serious dent in consumer inflation, even as economic data particularly surrounding … Continued
Most traders on Wall Street grew up in a low-interest-rate, low-inflation environment. It is hard for them to relate to why Volcker acted the way he did in the late-‘70s/early-‘80s. Greenspan, Bernanke and Yellen operated at a time when inflation … Continued
Inflation is all the focus right now – for the central bank, for stocks and for the average household. The Fed is tightening and wants to see consumer inflation make a dash toward its two percent target. There are incipient … Continued
US equities surprisingly were surprised by Powell’s hawkish message on Wednesday. He seems very determined to bring inflation down no matter what the cost to jobs and the economy. This will have repercussions for earnings, which then will reverberate through … Continued
Ahead of this week’s FOMC, equities seem unsure about the next major move. At this stage, markets want Powell and team to take the fed funds rate north of four percent by year-end. If the Fed manages to sound even … Continued
After three straight down weeks, both large- and small-caps rallied strong last week. More could follow should non-commercial futures traders, who remain heavily net short S&P 500 e-mini and Russell 2000 mini-index contracts, are forced to cover. Last week began … Continued
Next year’s earnings estimates for US companies peaked in April for large-caps and in June for small-caps. Given Powell’s resolve to significantly reduce the current four-decade-high inflation – no matter what the cost to jobs and the economy – the … Continued
At least a section of markets is behaving as if July’s job gains is sustainable, and the US economy is not on the verge of falling apart. The Russell 2000 has scored some technical wins, but the S&P 500 and … Continued