Fed Takes Sharper-Than-Expected Dovish Turn, Stocks Yawn

The Fed Wednesday held interest rates steady.  No surprise there.  But the bank was even more dovish than markets expected.  That was a surprise.  Even more surprising is how stocks reacted. The Fed Wednesday left the fed funds rate unchanged … Continued

Fed Likely To Again Use Balance Sheet As Tool, Stocks May React Differently

The Fed meets this week.  It already shifted its bias from hawkish to dovish, helping stocks.  With the economy softening, in due course the Fed may once again deploy balance sheet as a tool, which will initially help stocks, but … Continued

Bulls Defend 2600-2630 On S&P 500 Last Week – Market Reaction To FOMC Meeting This Week Likely Tell

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

Bulls last week defended support at 2600-2630 on the S&P 500, which has rallied massively since bottoming on December 26.  Daily conditions are deeply overbought, pricing in a dovish Fed.  A two-day FOMC meeting begins Tuesday.  A ‘buy the rumor, … Continued

After Decent Rally Last Week, Stocks Likely In Limbo This Week

After a decent rally in equities last week, this week has on the docket several potentially market-moving events – from FOMC meeting to mid-term elections to China trade.  Longs can think of selling some covered calls. Last week, two separate … Continued

By Year-End, Fed Funds On Pace To Exceed Inflation Rate – That Should Begin To Bite

posted in: Credit, Economy | 0

If the Fed moves in September and December, the fed funds rate will be in excess of core inflation.  In a leveraged economy, that should begin to bite.  The FOMC dot plot expects three more hikes next year.  This is … Continued

CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned

Following futures positions of non-commercials are as of May 1, 2018. 10-year note: Currently net short 445.7k, down 16.5k. US inflation of late has firmed up.  Core PCE – the Fed’s favorite measure of consumer inflation – jumped 1.88 percent … Continued

CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned

Following futures positions of non-commercials are as of March 27, 2018. 10-year note: Currently net short 305.2k, down 8.1k. For the first time since mid-December last year, 10-year Treasury yields went under the 50-day moving average this week.  On March … Continued

CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned

Following futures positions of non-commercials are as of March 20, 2018. 10-year note: Currently net short 313.3k, up 41.9k. Chairing his maiden meeting as Fed chief, Jerome Powell probably could not have asked for more insofar as markets’ reaction was … Continued