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THE TREND IS YOUR FRIEND

Data from the Federal Reserve states more companies are scared today than 2008. The Fed also writes the level of uncertainty is at a record, vastly eclipsing all other times. Moreover, almost every firm has declared the economy must begin reopening in the immediacy or irreversible damage may occur. Additionally, this same report indicates fears … Read more

“ONLY” 5.24 MILLION JOBS LOST LAST WEEK

Weekly jobless claims were lower than anticipated…5.24 million versus the estimate of 5.5 million.  Moreover, much to the surprise of many, last week’s claims number of 6.6 million had no substantial revisions. In four weeks, the economy lost a staggering and incomprehensible 22 million jobs. To put this number into perspective, more jobs have been … Read more

THE JOBS REPORT AND POWELL’S COMMENTS

In my view the August labor report indicated more strength than weakness.  Commenting about the perceived weakness, private sector and non farm payroll growth did nominally disappoint, posting a 130k and 96k increase, the gains were still considerably higher than the 100,000 new jobs required to maintain a steady unemployment rate.  Speaking of which, the … Read more

WAS YESTERDAY A HARBINGER OF THINGS TO COME?

At one time yesterday the rout yesterday in the two year Treasury—or the instrument most sensitive to monetary policy—was the biggest in ten years according to Bloomberg.  The 10-year saw the biggest increase since November 2016.  The catalyst for the selloff was three fold…trade, the ADP Private Sector Employment Survey and third the ISM non-manufacturing … Read more

JOBS DATA AT 8:30

May’s unemployment data is released at 8:30.  How will the statistics be interpreted?  The markets have discounted two interest rate reductions by year end.  Both Goldman and Morgan Stanley states that such will not occur opining at most only one could occur, using verbiage similar to that of the Federal Reserve in their outlook.  The … Read more

STRONGER THAN EXPECTED DATA IS CONTINUING

Retail sales jumped the most since September 2017 and first time filings for unemployment benefits dropped to a fresh 49 year low, as a strong labor market gives consumers the wherewithal to keep spending.  When first quarter GDP is released on April 26, analysts are now expecting a growth rate at or near 3%. Goldman … Read more

JOBS DATA AT 8:30

March’s unemployment data is released at 8:30.  In my view the data can confirm or deny the recessionary narrative.  As widely discussed February’s statistics were extremely confusing as growth in private sector and non-farm payrolls greatly disappointed while other components of the report indicated considerable strength. Speaking of strength, weekly unemployment claims fell to the … Read more

CAN THIS BE A SIGNIFICANT WEEK?

It appears the economic landscape is chaotic.  The dramatic shift of the Federal Reserve, trade, the use of algorithms, all drive the uncertainty in the markets and geopolitics. There are huge changes in narratives that greatly impact market direction. March’s unemployment data will be released Friday.  The statistics could either confirm or deny the prevailing … Read more

A SHORT MACROECONOMIC DISCOURSE

Equities rose on light volume as all focused upon the Fed’s surprise decision.  I will continue to argue that unless external risks rise, the central bank will be forced to change its stance in the immediate future. I ask what happens if China’s economy turns up in the second half of the year, a trade … Read more

WOW! A BIG SURPRISE

Wow!  That was a surprise.  The Federal Reserve was considerably more dovish than anticipated, suggesting no rate hikes for the remainder of 2019 and only one in 2020.  As early as yesterday morning, the Fed was perhaps suggesting 2 hikes in 2019.  The Committee downgraded growth and unemployment was revised up and the NAIRU (Non … Read more