Financial markets fear what comes next in U.S.-China trade war
It would be unwise to assume that today’s retaliation by China is the last tit for tat in the U.S.-China war. What “reasonable” fears are making rounds today? That the Chinese decision to let the yuan break the 7-yuan-to-the-dollar barrier...
China strikes back
We suspend our usual programming to cover the developing financial market and likely economic reaction to China’s decision to let the yuan tumble in retaliation to President Donald Trump’s decision last week to place a 10% tariff on an additional $300...
Trump’s new round of China tariffs freaks out financial–especially bond–markets
So much for any hopes that the resumption of U.S-China trade talks would put an end to the tariff war in anything like the near term. The new round of talks only began on Wednesday, was adjourned after a day, and was scheduled to resume in Washington in September....
Treasury says debt sales to remain at record levels for rest of 2019
Can you connect the dots? No one in Washington seems to be willing to make the effort. On a day when the Federal Reserve said it would cut its benchmark interest rate by 25 basis points and end its efforts to sell some of the bonds in its own portfolio two months...
Fed cuts interest rates by 25 basis points; financial markets want more, more, more
Today the Federal Reserve’s Open Market Committee cut the Fed’s benchmark interest rate by 25 basis points. That’s pretty much what the financial markets had been expecting–although a sizable minority of investors and traders had been hoping...
Goldilocks is alive and well, thanks to the U.S. consumer
The U.S. economy grew at a seasonally adjusted annual rate of 2.1% in the second quarter, the Bureau of Economic Analysis reported this morning. Economists surveyed by Briefing.com had projected that year over year growth in GDP would fall to 1.8%. So today’s...
A pause before tomorrow’s GDP report–and on worries about global growth
U.S. stocks paused as expected today ahead of tomorrow’s initial report on growth in U.S. GDP for the second quarter. Economists surveyed by Briefing.com are expecting that GDP growth dipped to 1.8% year over year in the quarter, down from 3.1% in the first...
Could that be a debt ceiling/budget deal I see?
The White House and congressional Democrats are nearing a deal to raise the debt ceiling for two years and fund the government, CNBC, the Wall St Street Journal and other sources are reporting today. The deal would suspend the debt ceiling limit for two years and put...
How big are the problems at Netflix? Too big for bottom fishing yet
It’s not just the huge miss on subscriber growth that has sent shares of Netflix (NFLX) plunging in the two days since it reported second quarter earnings. The stock fell 10.27%, or $37.23 a share, on July 18 and it was down another 1.87% today as of 2 p.m. New...
Is divergence between Dow Transports and Dow Industrials something to worry about?
According to Dow Theory the transportation index leads the Dow Jones Industrial Average higher and lower. A divergence between a climbing Dow Industrial Average and a falling Down Jones Transportation Average (DJTA) is an indicator of trouble to come. And that...
President’s remarks remind markets there’s still a trade war going on
At a cabinet meeting today President Donald Trump wanted to remind everyone that he could still impose additional tariffs on Chinese imports if he wants. The President also expressed impatience that the truce in the trade war with China hadn’t yet resulted in a...
China’s economy continues to slow in second quarter
Of course, we can’t trust China’s official GDP statistics. Government economists cook the books so that China’s growth stays within the goals set by the country’s leaders every year. But investors should pay attention to the trend. And this...
The global debt bubble continues to inflate
Okay, we all know that the current rally that has pushed U.S. equities to one record after another is built on cheap money. That is on a Federal Reserve that has promised to cut interest rates one, two, or maybe even three times in 2019. And on a hope on Wall Street...
Using softness to add more Treasury exposure to Volatility Portfolio–maybe you should be adding Treasuries too
Treasury prices have been a little weak over the last two weeks. As a consequence the Vanguard Intermediate Term Treasury ETF (VGIT) and the Vanguard Short Term Treasury ETF (VGSH), for example, have dropped from highs on June 25 of $66.03 and $60.94, respectively, to...In the longer short term does the market’s intense focus on interest rate cuts from the Fed set up a trap for stocks?
Looking at what I called “the shortish short term” in a post yesterday, I said that in that time frame the market is likely to behave as if nothing much matters besides the Federal Reserve and interest rate cuts. The logic, I argued, works like this:...
July interest rate cut from Fed looks like done deal after Powell testimony
Federal Reserve chair Jerome Powell had an opportunity this morning to talk down the odds of an interest rate cut at the central bank’s July 31 meeting in testimony in front of the House Financial Services Committee. He didn’t–and I think that makes...
Will the Fed try to talk down expectations for interest rate cuts this week? I don’t think so but…
Every word the Federal Reserve speaks this week and next will get examined in excruciating detail because with the Fed’s quiet period due to start on July 20, the central bank has less than two weeks to talk financial markets up or down ahead of the July 31...
The U.S. could hit debt ceiling default earlier than expected
Today, the Bipartisan Policy Center said there is a “significant risk” that the U.S. will breach its debt limit in September unless Congress acts. The last time the independent think tank projected possible U.S. default the group pointed to October or November. The...
Head of Cleveland Fed argues against July interest rate cut–markets shrugs off her comments
In a speech today, July 2, in London Loretta Mester, president of the Cleveland Federal Reserve Bank, argued against an interest rate cut at the central bank’s July 31 meeting. “Cutting rates at this juncture could reinforce negative sentiment about a...
Can earnings be the catalyst to take markets higher? Not this quarter, at least
Join me on my search for the elusive catalyst that could take U.S. stocks higher from what is already an all-time high. Quiet, though, catalysts can be very shy. Peaking through the bushes surrounding the water hole, I can see signs of company earnings. The big banks,...
China, U.S. economic data take gloss off of trade truce
Earlier this morning–11 a.m. New York time–the Standard & Poor’s 500 stock index was up almost 1% on news that talks between President Donald Trump and President Xi Jinping had resulted in a trade truce and the resumption of talks aimed at...
Is that inflation we see?
The core Personal Consumption Expenditures Index, the Federal Reserve’s preferred measure of inflation, picked up in May by 0.2% from April. That took the annual inflation rate to 1.6%. That was just above the median estimate from economists surveyed by Bloomberg and...
Adding Palo Alto Networks, #6 in my 10 Best Picks for the Rest of 2019 on JubakAM.com, to my Jubak Picks and Volatility Portfolios tomorrow
Today I made Palo Alto Networks (PANW) the sixth pick in my Special Report 10 Best Picks for the Rest of 2019 on my JubakAM.com subscription site. Tomorrow, June 28, I’ll add these shares to my Jubak Picks Portfolio and my Volatility Portfolio with a target...
How low can 10-year Treasury yields go? How about another 25 basis points
Today with the yield on the 10-year Treasury down to 2.02%, a drop of 2 basis points, two Wall Street heavy weights are predicting that we haven’t seen a bottom in yield yet. Not by a long shot. Goldman Sachs today cut its forecast for the year-end yield on the...
Oil rallies on U.S. inventory drawdown, record U.S. exports, slip in U.S. production–and, oh yes, those pesky tensions with Iran
U.S. benchmark West Texas Intermediate crude is now up 10% for the week following on a 2.44% jump in price to $59.24 a barrel today. International benchmark Brent crude gained 1.94% to $66.31 a barrel. Continued tensions between the United States and Iran, of course,...
Trump interview utterly confuses markets ahead of Saturday meeting with China’s Xi
So what does the United States want out of the Saturday talks between President Donald Trump and Chinese President Xi Jinping? In a Wednesday interview with Fox Business Network’s Maria Bartiromo Trump thoroughly confused expectations. The market consensus had been...
Whoa! on those interest rate cuts, the Fed says
The financial markets are getting ahead of themselves in a bad case of rate cut fever, Fed chair Jerome Powell, and St. Louis Fed President James Bullard both said today. This is a message that I’ve been waiting to hear as the financial markets moved to price in...
Confrontation with Iran continues to heat up
You can measure exactly how worried the oil sector is about more attacks in the Persian Gulf by trading the insurance premiums for oil tankers in the region. War risk premiums for a standard oil cargo from the Persian Gulf and the tanker hauling it can now cost...
$416 billion for seawalls in the United States by 2040–that’s a lot of gravel sales for Vulcan Materials
In the next 20 years spending on seawalls to protect communities could cost as much as the initial investment in the interstate highway system. Total spending to defend against rising ocean levels could run to $416 billion in the next 20 years, according to a report...Jim’s Daily Email Alerts:
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