Article Category: Inflation

What’s Driving this Complacency?

On Friday, both the S&P 500 and Nasdaq closed at new all-time highs, ahead of an election that could have had major consequences for the European union and the global economy. At the same time, the volatility index (also known as the fear gauge) remains near multi-decade lows.

To be sure, the outcome of the French election was widely expected, but it's still remarkable how complacent investors appear to be.

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Posted in: Bonds Federal Reserve Inflation Interest Rates Volatility

Finding a Balance

On Wall Street, more is always better. More revenue, more profit, more growth, more mergers, more IPOs, more money. But in the real world, more is not always better, and a rather unorthodox example of this is jobs.

First, let me state that yes, I too wish everyone who wanted a good-paying quality job could find one. In an ideal world, the unemployment rate would be zero and we'd all be holding hands and singing kumbaya. But this is not that world.

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Posted in: Economy Federal Reserve Inflation Interest Rates

What’s Driving This Rally?

Many of us in the U.S. have been swept up by what's come to be known as the "Trump Rally." The guise for this massive rise in stock prices over the past few months has been the promise of business-friendly tax reform, deregulation and infrastructure spending, among other "shareholder-friendly" initiatives.

The main theme has been one of "America First," which has elicited concerns about how far protectionist policies may go, and what the impact to our trading partners will be. Still others wonder how far asset prices will fall if and when the Trump administration runs into problems implementing their agenda - as we're starting to see.

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Posted in: Bonds Corrections Earnings Inflation Interest Rates Oil

A Change in the Wind

Markets are reacting to Friday's abandonment of the GOP health care plan, and so far the narrative is one of uncertainty regarding the high expectations that have been set over recent months.

The new health care bill was seen as the first real test for Trump and fellow republicans, and it's probably fair to say that they are not delighted with the outcome. But what about the markets?

At first glance, the markets didn't like the news either, as they opened with steep losses. The Industrials were down nearly two hundred points in early trading, but interestingly, have since pared those losses and now sit just 50 points below their Friday close.

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Posted in: Corrections Federal Reserve Inflation Interest Rates Momentum

The Slippery Slope of Interest Rates

All attention is once again on Janet Yellen and the Federal Reserve this week, as the FOMC meets to determine whether an interest rate hike is warranted.

At this point, with Fed Funds futures prices pointing toward a 95% chance of a rate hike, an increase to the federal funds rate is a near certainty. But the implications and consequences of a rate hike are less so. Let's dig into that further.

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Posted in: Debt Economy Federal Reserve Inflation Interest Rates

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