Fed Chair Powell Strikes A Dovish Tone On Thursday
Powell Spoke On Thursday In the midst of the uncertainty surrounding the potential tariffs on steel and aluminum, Fed chair Powell spoke to the Senate Banking Committee. It clearly wasn’t focused on as much as the Tuesday testimony. However, it was still important in my opinion. As expected, there were some quotes which were dovish. I strongly disagree…
Stocks Overreact To Potential Steel & Aluminum Tariff
Stocks Fall On Worries About A Trade War After the market had declined for a couple days over fears of a hawkish Fed, many wondered if stocks would rally on Thursday after investors hear Powell give a neutral testimony. Stocks were up in the morning, but then they cratered hard after news of President Trump…
13% Chance Of A Recession In 12 Months
Worst Decline In 2 Years With the S&P 500 falling 2.37% in the past two trading days, February closed with a whimper. Sometimes new money flows in on the first day of the month, so we’ll see how that plays out on Thursday. As you can see from the chart below, February was down 3.24% which…
Powell Set To Speak Thursday
Stocks Decline On Wednesday Yesterday, I challenged the market by saying it really wasn’t worried about Powell’s potential hawkishness. I said if stocks were really worried, they would be down more. The market answered the bell on Wednesday by falling at the end of the trading session. The S&P 500 fell 1.11% after being up…
Short End Of The Curve Could Cause An Inversion
Inflation Breakdown Since inflation was mentioned numerous times during Powell’s testimony and then in the interview with former Fed chairs Ben Bernanke and Janet Yellen, let’s look at a breakdown of the metric. As you can see from the chart below, the purple line shows the cellular data series Yellen referred to often last year.…
Fed Chair Powell Has His First Congressional Testimony
The Markets’ Reaction To Powell This Powell testimony reminds me of the Fed Minutes in that the markets’ reaction doesn’t make sense. There wasn’t much in the testimony which was hawkish, but the markets’ knee jerk interpretation was that it was hawkish. The market has been increasing the odds of 4 rate hikes this year.…
2018 Earnings Estimates Are Likely Done Increasing
The Estimates Are Done Rising The Q4 2017 earning season is now almost over. I will be reviewing the S&P Dow Jones numbers, but first let’s look at the chart which shows future expectations. With the GAAP earnings being hurt by tax related write downs in Q4, the future estimates are the most important aspect…
U.S. Economy An Emerging Market?
Cycles Not In Tune The developed markets are likely a couple years away from the end of their business cycle, while emerging markets are just recovering from their recession. India and Brazil had weak economies in 2017. They’re looking to see acceleration in 2018. The countries which export commodities are probably going to have a…
Stocks Finish The Week On A Winning Note
Finally, Stocks Rally Stocks were stuck in a rut this week. There were a bunch of failed rally attempts. It’s demoralizing to give up gains so often. It made some investors wonder if the correction was still ongoing. The bears were out in full force predicting the next bear market and recession even though there’s…
Central Banks Headed In The Hawkish Direction For The First Time In 9 Years
Hawkish For The First Time In 9 Years The chart below is very interesting because it combines the Bank of England, the Fed, and the ECB’s policy to come up with a rolling 5 year average of rate changes. I would have used a 3 year average because I feel that 5 years is too delayed…
Recent Comments