— The gorilla, of course, is Fed policy and rising interest rates. — For certain segments of the market (Big Tech/The Innovators in particular) it rightly looms large. — For the rest of the market Wednesdays action was an exercise in ‘sawing sawdust’, reacting in a predictable way to old news. — The market sends a clear…
Tag: interest rates
Covid Omicron: The bears have Thanksgiving
— Will the Bulls have Christmas? — “There are known knowns. These are things we know that we know. There are known unknowns … ” — An apt description of the new world of Covid Omicron. — Worst case scenarios — Too Much Information — the number of mutations on the spiked protein — Take a deep breath….
UST 10-year rockets — a misguided attempt at beating the Fed to the punch
— A flight to safety … the yield on the 10-year treasury drops 15% in two weeks in a raging bull market. — For some investors (computerized or not) fears of higher interest rates and inflation trump a rip-roaring economy with a tankful of fiscal stimulus and easy monetary policy as far as the eye can…
Tuesday’s Market Bloodbath: Is Still “Much ado about nothing”
–Tuesday September 28, 2021 showed us a very predictable market reaction to No New News, save greater conviction that inflation may not be that transient and rates will be going up. –Market participants (including their computers) have been conditioned by the media to react in this way over decades and there is no nuance with the…
The Big Lie About The End of Quantitative Easing and Other Media Malpractice
–There is a falsehood constantly perpetuated by the media that the end of Quantitative Easing (QE) will be bad for the market and you should worry about it. –This is hard to imagine given that the emergency which brought us QE has passed, and QE’s ability to keep rates lower may be greatly exaggerated. –Why is it that Chairman…
A fact that is not completely factual: The market sets record highs!
— Record market highs we are experiencing relate more to capitalization weighted indices than strength in the average stock composing those indices — Tear apart the numbers and the results show we have been in a significant downturn in the simple average stock since February 2021 — “Aren’t you worried? The market just keeps going up and up!”…
What’s bugging’ this market? Record highs and no celebrations
— A series of new all-time index highs but no popping of corks — A flight to safety goes on under the surface–a 1.25% yield on the 10-year Treasury July 7, couple with a ‘risk off’ 7% drop in the Russell 2K since July 1 — Are we headed for an economic slow-down or recession? This question…
“The bond market agrees with the Federal Reserve — inflation is temporary” Huh!
— “Inflation has peaked.” — “The rate of growth has peaked at home and abroad, as well.” — “Investors of all stripes, foreign and domestic, are offsetting their exposure to equities by purchasing high quality Treasuries to provide ballast in their portfolios.” — “The spread of the Covid delta variant may slow global growth if…
The Stock Market: Dazed and Confused to The Max
— Two key historic characteristics of the stock market: It works to confuse and confound the maximum number of people most of the time while providing excellent long-term returns. — So-called “hawkish” commentary by the Fed is credited with sending stocks into a tailspin while, strangely enough, buyers showed up for the US Treasury 10-year which’…
Fed OMC day: Usually a good day be a stock buyer!
— Market history of the past 11 years confirms this assertion. — It is a gift given to us by the media … tales “full of sound and fury, signifying nothing.” –Today’s report was par for the course, causing a knee-jerk 382 point drop in the Dow followed by a barrage of inane, Powell parsing commentary….