September retail sales exceeded all expectations. Overall sales rose by 0.4% and ex-autos and gas sales climbed by 0.7%. The previous month was also revised higher. Weekly jobless claims were also lower than expected. The data continues to deny the week economy thesis perhaps raising Fed worries that the renewed strength will fuel an uptick … Read more
Value and the smaller capitalized issues outperformed the mega caps again yesterday. A quote on a financial website read “Investors may be looking to rotate away form large technology companies, which are widely owned and have fewer clearer catalysts going forward.” As widely acknowledged growth..aka the mega cap issues—have outperformed for many years at the … Read more
The NASDAQ stumbled after disappointing earnings from Europe’s most valuable tech company and concerns about tighter US restrictions on chip sales. Some believe the tech/chip sectors are/were priced to perfection and any mis steps would be met with selling. An issue at hand if everyone already owns the sector who is left to buy if … Read more
Earnings season commences in earnest. Have expectations been lowered? As noted last week, Bloomberg reports that 3Q results should rise by 4.2% for the quarter, down from a 7.9% expected growth projected in mid-July. Bloomberg further states 37% of S & P 500 companies are expected to report lower earnings per share than the previous … Read more
Underlying inflation rose more than forecast in September, representing a pause in the recent progress toward moderating price pressures. The core CPI—which excludes food and energy—increased 0.3% for a second month, disrupting a string of lower readings. Year over year the core CPI is up 3.3% and the three-month annualized rate advanced by 3.1%, the … Read more
Equites staged moderate gains ahead of September’s CPI which is released this morning at 8:30. Analysts are expecting a 0.1% monthly increase and a 2.3% annualized jump, slightly lower than August’s levels. The core CPI is expected to rise by 0.2% and 3.2% year over year, the same increase as last month. Writing the obvious, … Read more
The volatility in the bond market is intense. Treasuries have sharply sold off following a strong September jobs report, leading to a quick change in sentiment. The declines since Friday have pushed the yield on the benchmark two- and ten-year Treasury notes above 4% for the first time since August. Swaps are now pricing a … Read more
Equites declined as both the 2-year and 10-year Treasury now yields over 4%. Yields for both benchmarks are around 40 bps since the Federal Reserve lowered interest rates by 50 bps three weeks ago. The catalyst for the increase is yields are varied. Economic growth greater than anticipated with the Atlanta GDP Now forecast is … Read more
September’s employment data was strong in every dimension, exceeding all published estimates. Job growth last month was the largest since March, the unemployment rate unexpectedly declined, and wages increased at a pace much greater than expected. Moreover, the pace of wage gains from the prior month was revised higher. Wages are the largest cost of … Read more
The September BLS Employment report will be released at 8:30. Analysts are expecting a 150k and 125k increase in non-farm and private sector payrolls, a 4.2% unemployment rate, a 0.3% increase in hourly earnings, a 34.3 average workweek and a 62.7% labor participation rate. Broad based conclusion can be made from this data, conclusions that … Read more
