July’s employment data exceeded all estimates. More importantly the previous month’s data was revised higher thus suggesting considerable underlying strength. Perhaps of considerable significance was the greater than expected increase in wages. Year over year wages are up 4.0% versus the projected increase of 3.6% according to Bloomberg. Average hourly worked, which is an indicator … Read more
Value led yesterday’s decline perhaps the result of a disappointing ISM non-manufacturing report. The service sector is not expanding as strong as expected, primarily the result of a dearth of workers. The order backlog was the highest in the group’s data going back to 1997. Prices paid surged by the greatest amount in history going … Read more
The end of the first quarter is quickly approaching. Many, myself included, have expressed concerns about potential quarter and month end rebalancing. Long dated US Treasuries are down about 14% for the year and over 23% from August. As noted several times the Treasury market has entered into its first bear market since 1980. Will … Read more
Equities advanced on vaccine optimism. Markets were also cheered by the stronger than expected growth in China and India. The dollar extended its slide to a more than a two-year low, perhaps the result of another stimulus program. Treasuries declined for the same reason. The 10-year was crushed 10 basis points, one of the biggest … Read more
Commodity Trading Advisors (CTAs), or managers that typically make money by riding trends in financial futures, are the next systemic “no risk” trading program that is now imploding. The cause is open to debate. Some believe because it became too crowded, that all were doing the same thing. Others suggest the massive concentration of wealth … Read more
What will be this week’s prevailing narrative? The decline in the number of deaths and cases? The extent of the economic calamity via the government mandated shutdown? The prevalence of a “second wave” in states that have decided to partially reopen? Last week Governor Cuomo stated with increased testing, the death rate in NY is … Read more
What can not remotely describe the markets. Implosion. Cataclysmic. Tectonic. Paralyzing. What makes today different is the speed of the unrelenting decline where a liquidity issue is perhaps morphing into a solvency issue. The Federal Reserve threw everything in including the kitchen sink to perhaps to no avail. In my view the total domination of … Read more
It is ugly!!! The S & P 500 just had its fifth worst percentage decline in history. It was the greatest percentage drop since October 19, 1987. One large trading firm commented that they have tried everything to appease the anxiety…exercise, alcohol, denial, all to no avail. The firm is now resulting to the tried … Read more
Legendary hedge fund manager Howard Marks from Oaktree wrote The large potions occupied by the top recent performers—with their swollen market caps—mean that ETFs attract capital, they have to buy large amount of these stocks, further fueling their rise. Thus, in the current up-cycle, over weighted, liquid, large cap stocks have benefitted from forced buying … Read more
An argument can be made the world’s sovereign debt markets just got a lot riskier as Sweden just ended a half of decade of negative rates. The question at hand will other central banks follow their lead? Everything in the world is priced off the US Treasury and global yields have a direct impact upon … Read more
