Russell 2000 Retreats After Coming Ever So Close To Nov ’21 Record; S&P 600 Operating Earnings Now On Track To Decline This Year

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

The Russell 2000 just made a three-year round trip but fell slightly short of posting a new high. The economy continues to perform well – a plus – but long rates have diverged with short rates, which cannot be a … Continued

Dovish Message Likely To Ignite Positive Wealth Effect From Equities And Home Prices

posted in: Economy, Equities, Technicals | 0

Markets were on pins and needles as to if Powell would be open to the possibility of a rate hike. He hardly sounded hawkish Wednesday. A dovish message hardly helps cool down the positive wealth effect coming from equities and … Continued

Doves Fly, Bulls Run, Animal Spirits On Loose

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

Even though Chair Powell said it is far too early to declare victory, he and his team did exactly that yesterday when they caught markets by surprise by making a hard dovish turn. The dot plot now expects up to … Continued

On FOMC Day, Thinking About Subdued Consumer Inflation And Raging Asset Inflation

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

As the FOMC winds up its two-day meeting today, one cannot help but think of the Fed put that has led investors to take on risk and go up the risk curve, driving one after another metric into uncharted territory. … Continued

Bulls Cannot Afford Breach Of 2100+ On S&P 500 And 950-960 On Russell 2000

posted in: Credit, Equities, Technicals | 0

The announcement of QE4 last week failed to stabilize stocks.  This is unlike how they behaved during QE1/2/3.  Fear rules.  Just a month ago, greed did.  Sentiment will reverse.  Last week, major U.S. equity indices were once again slammed.  Even … Continued

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

Following futures positions of non-commercials are as of February 11, 2020. 10-year note: Currently net short 398.9k, up 40k. The Fed for all intents and purposes has been preparing the markets for more liquidity to come. Since late September last … Continued

Fed Would Like Animal Spirits Unleashed – Would Investors/Businesses Oblige?

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

The sharp decline in US stocks last October-December forced the Fed to do a 360 as relates to its campaign to tighten monetary policy.  The dovish shift apparently wants to unleash animal spirits.  Investors have obliged – thus far.  Will … Continued

Markets Looking For Hints Yellen Put Alive And Well

posted in: Credit, Economy | 0

Later today, markets will learn if, when it comes to the so-called Fed put, it is game as usual or winds of change are beginning to blow. The Fed put refers to a practice of reducing interest rates to deal … Continued