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Feb 25

Remember the Yield Curve?

The yield curve was all the rage in 2023. As investors witnessed the deepest and longest-lasting inversion in modern history, a recession seemed all but inevitable given the yield curve’s stellar (up to that point) track record of predicting economic contractions. So a lot of ink, both physical and... read more →
Feb 18

Housing Market Concerns

This morning the latest survey from the National Association of Home Builders was released and the details were a bit concerning. The overall Housing Market Index (HMI) fell to a score of 42 from 47 the previous month. Like other survey measures, a reading below 50 means that more... read more →
Feb 13

Hotter Inflation Means Longer Fed Pause

January CPI inflation came in much hotter than expected this morning, with headline CPI rising at 0.5% for the month – the fastest monthly increase since April 2023.  Digging into the numbers, there are reasons to believe that seasonal factors may have played a role in the upside surprise... read more →
Feb 04
Jan 28

DeepSeeking an Explanation from Big Tech

With about 20% of companies in the S&P 500 index having reported earnings for Q4 of last year, it is now Big Tech’s turn. Six out of the seven largest companies in the S&P 500 index (Apple, Microsoft, Amazon, Meta, Alphabet, Tesla), making up roughly 26.4% of its market capitalization,... read more →
Jan 23

A Much Better 10 Years For Fixed Income

Government bond total returns have been disappointing over the last 10 years annualizing 1% from 2014 to 2024. Due to the strong relationship between the 10-year yield and forward 10- year returns, shown in the chart below, that isn’t too surprising as yields hovered around 2% from 2012 to 2019,... read more →
Jan 17

Q4 Earnings Season Off to a Great Start

Q4 earnings reporting is officially underway, and it is off to a great start. The big banks kicked off the season as usual, and they immediately knocked it out of the park. JP Morgan, Citigroup, Bank of America, and Wells Fargo, as well as investment banks Goldman Sachs and Morgan... read more →
Jan 14
Dec 19

FOMC Not In The Holiday Spirit

The Federal Reserve cut the Fed Funds Rate by another quarter point yesterday, and yet markets tanked anyway with stocks suffering their largest “Fed Day” sell-off since March 2020.  It turns out that Chair Powell and the rest of his colleagues on the Federal Open Market Committee (FOMC) are in... read more →
Dec 18

Money Market Funds Still Popular, For Now

Despite the Fed having already cut rates twice since September (and likely cutting them again today), the amount of assets sitting in money market funds keeps piling up. As of last week, money market fund assets amounted to a whopping $6.77 trillion (top panel below). For historical context, this amounts... read more →