King Dollar Has “Unfinished Business”

This week was about one thing, and one thing only: uber hawkishness from the Fed. To be sure, “uber hawkishness” means something entirely different today than it meant in the Volcker years. Now, you’re a hawk if you think the Fed Funds should be 75 bps. Still, it’s all relative. We live in a world…

Why One Bank Thinks Emerging Markets May Be In Trouble

Let’s talk about emerging markets. Over the past five days, it’s become abundantly clear that the Fed was getting a bit nervous about the odds the market was assigning to a June rate hike. In short, it was readily apparent that virtually everyone assumed next month was a no go. The looming Brexit referendum only…

Margins Or Buybacks: What’s Really Driving S&P EPS Beats?

While perusing FactSet’s “Thought Leadership” section on Friday I ran across something interesting. There’s a narrative out there about buybacks that’s been propagated by a variety of outlets over the past 12 or so months that ties ZIRP and share repurchases to equity strength. To be sure, it’s a compelling argument. Here’s how it goes.…

Calls For “Helicopter Money” Grow As G7 Meeting Betrays Global Growth Jitters

Finance chiefs from the G7 economies are meeting in Japan this weekend ahead of next week’s G7 summit. At the top of the agenda: sluggish global growth. As anyone who follows global macro is acutely aware, Japan is in many ways the poster child for subdued economic activity. Last year, the country received the rather…

Here’s What To Watch Ahead Of The All Important June Fed Decision

Well, here we go again. Both crude and stocks got off to a rocky start on Thursday as the Dow plunged triple digits and oil fell more than 2.5%. The culprit: why, the Fed of course. This week has reinforced the market themes that have played out for most of this year. On Monday we…

Fed Stuns Market With Hawkish Meeting Minutes, June “Live” After All

Surprise, surprise. Minutes from the Fed’s April meeting are out and the message is overwhelmingly hawkish. June is “live” after all. Equity markets immediately dipped into the red although after yesterday’s commentary from Williams and Lockhart, investors probably should have expected this. In hindsight, it looks like the San Francisco and Atlanta Fed chiefs were…

Trouble With The Curve? Yield Curve Flattens Most Since 2007 While Goldman Turns Bearish On Stocks

On Tuesday, equity markets stumbled after a firm CPI print and upbeat commentary from the San Francisco Fed’s John Williams and Atlanta Fed President Dennis Lockhart seemed to suggest that a June rate hike might still be a possibility. The triple digit decline on the Dow represented a return to a perverse dynamic created by…

Stocks Swoon As Good News Is Still Bad News

It was just yesterday when Richmond Fed chief and consummate hawk Jeffrey Lacker told The Washington Post that in his view, the FOMC needs to “catch up” after falling behind the curve (no bond market pun intended) on policy normalization. Whatever impetus there was for a March hike promptly disappeared after stocks got off to…

Going To Zero? LendingClub Tumbles After Disclosing DoJ Subpoena

Going into this week, some traders assumed things couldn’t get any worse for LendingClub. Shares in the beleaguered marketplace lender tumbled last week following an internal investigation into falsified loans sold to Jefferies and after it was revealed that CEO Renaud Laplanche failed to tell the board about a stake he had in a fund…

Lower For Longer: Street Bets On Treasury Rally As Top Fed Official Warns On Policy

"I think markets may be extrapolating from our recent behavior and thinking all we do is delay.” That’s from Jeffrey Lacker and it’s entirely accurate. Lacker has been a vocal critic of the FOMC’s easy money policies for years and on Monday, The Washington Post published an exclusive interview with the Richmond Fed chief. Back…