What The Fed Means When It Says Stocks Are Expensive
As I mentioned, the Fed said in its Minutes that valuations were ‘quite high.’ CNBC decided to do an analysis of how stocks performed one year after the Fed has said stocks were expensive because the Fed rarely comments on valuations. As you can see in the chart below, the Fed has commented on how…
Fed Discusses Balance Sheet Reduction In Minutes
In the last Q&A Yellen did, she mentioned that the FOMC members didn’t want to consider the unwinding of the Fed’s balance sheet to be a part of the hawkish policy of rate hikes because the Fed had no experience with unwinding its balance sheet. She said communicating policy on the unwind of the balance…
Blowout ADP Report
In this article, I will review the latest economic reports and review some data on buybacks. The ADP private sector payrolls report came in better than expected, but there was a large negative revision in the February report. The ISM non-manufacturing report missed expectations. This could be sign the strong survey data trend is starting…
Don’t Fight The Fed
The stock market continued its trend of not doing much on Tuesday as the S&P 500 eked out a 0.06% gain. The main political story in the news is the Senate’s vote on whether to approve Judge Gorsuch’s nomination to the Supreme Court, so there’s not much market moving stories coming out of Washington D.C.…
Follow The Fed Pension Fund’s Actions
Fed Pension Fund Bearish? I disagree with almost all the Fed’s monetary policy decisions, but I have found one Fed related vehicle which I agree with. The vehicle I agree with is the Fed’s pension plan because it has been lessening exposure to equities. The Fed’s plan is not run by Fed members. However, it…
Volatility Second Lowest Ever
Lately I’ve been focusing on the bond market and the dollar more because the stock market simply is not doing much. I sometimes joke that the stock market isn’t on or is broken because there have been so many days where it closes nearly unchanged. In Q1 2017, the Dow had 15 days where it…
Ten Year Yield Falls To 2.33%
Monday was the first day of the second quarter which usually means new money is flowing into the stock market. However, there was a minor sell off led by financials. Besides it being the first day of the month and quarter, another reason why I thought stocks may have rallied Monday is because Senator Rand…
Productivity Fell 0.2% In 2016; Stocks Rose 5.5% In Q1
The first quarter is now in the books. It was quite an interesting three months as President Trump was sworn in and stocks had an amazing run as they maintained the post-election momentum. The chart below shows the powerful rally in the S&P 500 since the election. The S&P 500 was up 5.5% for the…
WTI Was Up 5.5% This Week
In this article, I will review some of the trends I have been discussing and the news surrounding them. Then I will discuss the latest movements in oil. After the crash to the upper $40s, the commodity has moved back above the $50 level this week. This is great news for the American shale firms.…
Record Margin Debt Makes Stock Market Vulnerable
In this article, I will tie up some loose ends from a previous article. I’ll give more supporting facts to further my points. Then I will contextualize the recent statements made by President Trump and NY Fed President Bill Dudley. I have an interesting chart which supports my analysis on the likelihood of various fiscal…