April’s jobless data was weaker than expected. Non-farm payrolls advanced 175,000 last month, the smallest gain in six months. The unemployment rate ticked up to 3.9%, the labor participation rate held steady but the pivotal rate for workers aged 25-54 increased to 83.5%, matching the highest level in two decades. Increased participation will help restrain … Read more
April’s unemployment data is released at 8:30. Bloomberg reports that the options market says stocks will swing widely after its release as it is expected that it will offer more clarity on how much the Federal Reserve may cut interest rates this year.Bloomberg writes the options market is expecting the S & P 500 to … Read more
Equites were initially spooked by data indicating that factory activity contracted for the first time since 2022 Moreover and perhaps more frighting, a measure of costs for materials and other inputs rose for the second straight month with the gauge increasing the highest level since June 2022. The JOLTS Job Openings were lower than anticipated … Read more
The FOMC will make a statement at 2:00 P.M. How will it affect psychology? No change in interest rates is expected.Yesterday a broad gauge of labor costs that is closely watched by the Federal Reserve accelerated in the first quarter by more than forecast. The Employment Cost Index (ECI), which measures wages and benefits, increased … Read more
The narrative is rising to extend the trading day. A Bloomberg article questions the rationale for such a change. According to the newswire, the regular market runs for 390 minutes on a standard trading day, however it might by the last 10 minutes that may only matter. Bloomberg states a third of all S & … Read more
A Bloomberg headline Friday read “AI Craze Powers Best Week in 2024 for Stocks.” The earnings induced surge in both MSFT and GOOG coupled with an inflation report that largely met expectations was the catalyst for Friday’s advance.The monetary policy narrative has radically changed with the markets now “reasonably assuming one interest rate cut, maybe … Read more
The headlines of the initial estimates of first quarter GDP were ugly. GDP rose at a 1.6% annualized rate, below all projections. What was perhaps more disturbing were the pricing pressures. A closely watched measure of underlying inflation advanced by 3.7%, also exceeding all estimates. Is stagflation at hand? Both the equity and Treasury markets … Read more
Treasuries remained under pressure as the jumbo sized $70 billion 5-year Treasury auction was met with demand slightly below expectations. Some had anticipated strong demand given the recent back-up in yields that are around multi decade highs. How will today’s $44 billion 7-year Treasury auction bet met? Some are beginning to publicly question whether the … Read more
Equites rose on earnings optimism. As written yesterday, Bloomberg reported a record 63% of the 409 respondents to its poll expect earnings to give equities a boost. This is the highest vote of confidence for corporate profits since the poll began asking the question in October 2022 according to the newswire. The markets may know … Read more
Treasuries rebounded nominally yesterday after a brutal selloff that sent yields to their highest level since November. Equities however struggled amid a slide in tech megacaps. Bloomberg reports the equity risk premium—a measure of the differential between stocks and bonds expected returns-is now deep in negative territory, something that has not happened since the early … Read more
