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
Markets yesterday had a nervous undertone. What will be the impact of the longshoremen strike? Will inflationary pressures reignite given that wages are the largest cost of production? Will other unions/workers make similar demands? Will public service sector unions become as dogmatic as the longshoreman/UAW/Boeing strikers? And then there is the Middle East. It is … Read more
It is often stated that truth is the first virtue lost in truth and war. The question today is what is truthful? Is the next data point truthful? It is widely accepted that the establishment of the internet slowly increased the flow of information than suddenly overwhelmed all with a massive increase in volume. According … Read more
Markets were relatively quiet ahead of a week filled with top tier statistics. A speech by FRB Chair Powell was generally market insignificant as he stated the Committee was in no hurry to cut rates. Treasuries ended lower in price however the two-year Treasury or instrument most sensitive to monetary policy y were up for … Read more
Treasury yields declined nominally as the Fed’s preferred gauge of underlying inflation rose mildly in August. The core PCE was up 0.1% from July and 2.7% from a year ago. Last month the 12-month increase was 2.6%. The data largely met expectations. The yield curve steepened. The markets have fully discounted an additional 175 to … Read more
