Monday, March 27, 2023
We started the year with data showing a recession was likely 2024 or later, and that meant rates were “higher for longer”. So far, the data tells the same story, but there is one early read-through that is a red flag.
Monday, March 20, 2023
There is an old saying among technical analysts that the only thing that matters for stock prices is how much money is available and how much that money wants to go into stocks. The Fed just added $446B in liquidity and GDP is tracking 2.5% above estimates - with earnings season just a few weeks away.
What Would Volcker Do?
Monday, March 13, 2023
Moves into Treasuries like last week were the norm before Greenspan, as were bank failures. If Powell wants to be like Volcker, he will stay on track regardless of SVB's collapse.
Monday, March 6, 2023
The February jobs report has downside risk as indications show that slowing job growth has begun, but this, along with the price action, is just following the textbooks.
Monday, February 27, 2023
It is becoming increasingly clear that near-term earnings estimates have been revised too low, which suggests strength beyond earnings season.
Tuesday, February 21, 2023
Just as investors are getting excited about the strength that companies have discussed this earnings season, economic activity has stalled.
Too Strong Balance Sheets
Monday, February 13, 2023
Paul Volcker stated that monetary policy reduces inflation by causing bankruptcies. However, the current financial strength of balance sheets makes it difficult for bankruptcies to occur. This means that the improving economic conditions at the beginning of 2023 have led to higher prices, and the Fed Funds Futures are just starting to reflect this.
But How's That Trade?
Monday, February 6, 2023
The market should now be catching on to the realization that a recession in 2023 is becoming less likely, but higher interest rates are going to continue. The question is, how does that trade from here?
Strength is a Headwind
Monday, January 30, 2023
Companies are confirming improved trends in January, but that creates a headwind regarding the Fed announcement on Wednesday, with employment appearing to have rebounded in January too.
May Have Troughed
Monday, January 23, 2023
Economists project a recession in the second half of the year. Analysts expect earnings growth to bottom in the first quarter. Meanwhile, leading economic data suggests conditions may have troughed in December.