Between Buybacks And Dividends, Latter Rewards Shareholders Better

posted in: Economy, Equities, Technicals | 0

One of the hallmarks of post-Great Recession recovery has been subdued capital expenditures.  In 2Q16, real non-residential fixed investment was $2.19 trillion (at a seasonally adjusted annual rate) – essentially flat since 3Q14.  Investment peaked at $2.22 trillion in 3Q15. … Continued

Fed Giveth, Fed Taketh Away?

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

Seven weeks of sideways action on the S&P 500 large cap index has been resolved.  Last Friday, the index dropped 2.5 percent, for a weekly drop of 2.4 percent.  This comes on the heels of an important breakout in July. … Continued

Markets Dance To Fed’s Tune Way Too Much … Matter Of Time Before This Backfires

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

Markets are under the influence of the Fed’s rate hike talk – or a lack of it – a little too much … to such an extent that it can potentially backfire someday. Last Thursday, we learned that the ISM … Continued

Infrastructure Spending Plans High On Optimism But Low On Practicality?

posted in: Credit, Economy | 0

The two major U.S. presidential candidates share at least one common interest.  Both talk about the need to increase infrastructure spending. Democrat Hillary Clinton has a five-year $275-billion program.  Republican Donald Trump says he would spend at least twice as … Continued

Amidst S&P 500’s 3.6% Fri Tumble, Looking For Signs Of Reversal N/T On Spot VIX

Last Friday, post-Brexit win, the 10-year Treasury yield declined 16 basis points to end the session at 1.58 percent.  It fell as low as 1.53 percent at one point during the session.  The drop ensured 10-year yields remained below support … Continued

XLF, Rallying Along 2-Year Treasury Yield, Likely To Offer Opportunity To Shorts In Due Course

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

The correlation between financials and the two-year Treasury yield is tight.  The latter tends to be sensitive to Fed action. In recent months in particular, the two-year has been on a roller-coaster ride trying to keep up with FOMC members’ … Continued

Risk/Reward Favors S&P 500 Shorts Near- To Medium-Term

The chart below (Chart 1) caused a lot of stir last Friday – across asset classes, primarily in the U.S., and elsewhere. The U.S. economy only added 38,000 non-farm jobs in May, much weaker than expected and the lowest monthly … Continued

Hawks Versus Doves – Odds Of Former Losing Ground In Rate Debate

posted in: Credit, Economy | 0

The Fed’s dual mandate currently is a source of ammo for both hawks and doves within the FOMC.  Would it always remain this way? Core PCE inflation has been ticking up a bit of late, but still below the Fed’s … Continued

Fed Up — Doing Same Thing Over And Over, But Expecting Different Results!

Three months.  That is all it took for the Fed to do a 360. In the middle of last December, the fed funds rate was raised for the first time in nine years – to still-zero-bound 37 basis points.  The … Continued