What does the collapse of Silicon Valley Bank mean for your portfolio?
The answer is very little and a whole lot. It depends. I’ll explain. Here’s what we know about the sequence of events that led to the collapse of Silicon Valley Bank, a bank with $209 billion in assets as of the end of December. (As of 2022 year-end,...
Please Watch My YouTube Video: 6% Yes, 8% No
Today I posted my two-hundred-and-fortieth YouTube video: 6% Yes, 8% No. Today’s topic is: 6% Yes, 8% No. I’ve been saying that I think 6% is the peak for interest rate increases from the Federal Reserve this cycle. Inflation is not coming down as fast as...
Treasury Department moves on bond market liquidity worries
The bad news is that the Treasury Department is worried about liquidity stress in the huge market for U.S. Treasuries. The good news is that the department is moving to do something about the problem. In its quarterly survey of primary Treasury bond dealers, the...
Please watch my new YouTube video: The Market is Badly Mispricing Risk
My one-hundred-and-seventy-first YouTube video: “Trend of the Week The Market is Badly Mispricing” went up today. Market prices say that investors and traders don’t think things are very risky, especially in the long run. Look at the yields on the 10...
Fed’s Brainard sinks Treasuries and stocks with talk of more and faster inflation fighting
In remarks prepared for a Tuesday speech to the Minneapolis Federal Reserve Bank Federal Reserve Governor Lael Brainard said “Currently, inflation is much too high and is subject to upside risks. The committee is prepared to take stronger action if indicators of...
Treasury yield curve inverts–a Recession indicator drops into place
Yesterday, March 28, a substantial piece of the Treasury yield curve fell into inversion. The yield on the 5-year Treasury climbed to 2.57%. Which put it above the yield both the 10-year Treasury at 2.46% and the 30-year Treasury at 2.55%. “Normally”...
Flight to safety means selling anything today
With Russian troops laying siege to Ukraine’s two largest cities, I certainly don’t blame financial markets for a high degree of anxiety. After all investors and traders are also looking at the consequences of massive sanctions piled on Russian banks...
Watch my new YouTube video: Trend of the Week 10-Year Treasury Notes are Tracking Volatility
I’m starting up my videos again–this time using YouTube as a platform. My eightieth YouTube video “Trend of the Week: Ten-Year Treasury Notes are Tracking Volatility” went up today. Please watch and subscribe to my YouTube channel. And like my...
CPI inflation ran at 6.8% annual rate in November–exactly what economists had projected so stocks moved higher
Stocks rose today, December 10, as a huge jump in CPI inflation exactly matched economists’ projections. As they say on the basketball court, “No surprise; no foul.” The Consumer Price Index (CPI) climbed at a 6.8% annual rate in November....
Selling remaining Treasury ETFs out of my portfolios
On what looks like solid odds for interest rate increases in 2022, I’m selling my remaining Treasury ETFs out of my portfolios. (Treasuries drop in price as interest rate and yields climb.) I’m selling the Vanguard Short-Term Treasury ETF (VGSH) out of my...
Move over Fed; Treasury is about to cut its bond insurance by $1 trillion
While financial markets try to guess the pace at which the Federal Reserve will reduce its $120 billion a month in Treasury and mortgage-backed asset purchases, the Treasury Department looks to be on the verge of scaling back its quarterly sale of longer-term Treasury...
Tomorrow’s September jobs number is the BIG DEAL for this week
Economists surveyed by Bloomberg are expecting the economy to have added 500,000 jobs in September. Anything way above or way below the number will move expectations on when the Federal Reserve will begin to reduce its monthly purchases of Treasuries and...
Treasury secretary Yellen puts October 18 deadline for default
In a letter to House Speaker Nancy Pelosi today, September 28, Treasury Secretary Janet Yellen told Congress that the U.S. will run out of flexibility to avoid breaching the debt limit on October 18. If the Treasury can’t continue juggling obligations past that...
Treasury yields broke out of their range last week
After being range-bound for months, yields on the 10-year Treasury broke through the top of a range that’s held since mid-July. Yields ended the week at 1.45%. The 50-day moving average on 10-year yields was 1.29% on Friday. The 2021 low, set in August, was...
Stocks gain on “No surprises” speech from Powell
Federal Reserve Chair Jerome Powell didn’t surprise Wall Street with his speech today at the (virtual) Jackson Hole central bankers conference. Instead he left the Federal Reserve on a path to begin reducing its purchases of Treasuries and mortgage-backed assets...
Stocks decide inflation is in retreat and move higher
The Consumer Price Index climbed 0.5% in July. That was in line with Wall Street expectations. And down from the 0.9% gain in the inflation index reported for June. That was enough to send stock prices higher as investors and traders decided the data supports the...
So when does the Federal Reserve become the Treasury market?
Back in 2018 the Federal Reserve started to run down its valance sheet out of concern that its asset pile had grown so large that the central bank was in danger of becoming the market for things like Treasuries and mortgage-backed assets. (For some of the dangers in...
Watch Thursday’s TIPS auction for clues to inflation expectations
Inflation watchers–just about everyone in the financial markets these days–will focus on Thursday’s auction of $13 billion in 10-year TIPS (Treasury Inflation-Protected Securities) in the search of clues about the direction of inflation. Or...
Today’s ADP jobs survey keeps markets on edge over Friday’s government jobs report for April
U.S. private employers in April added the most jobs in seven months, according to data from the ADP Research Institute released today. Company payrolls rose by 743,000 in the month. That’s a big gain from the upwardly revised 565,000 gain in March. And...
Long-dated Treasuries continue to sell off, are now heavily shorted
Short interest in the $12 billion iShares 20+ Year Treasury Bond ETF (TLT) rose to 25% of shares outstanding this week. That’s the highest level since early 2017, according to data from IHS Markit. Investors and traders continue to dump the long Treasury and the...
Jobs, jobs, jobs: A blockbuster report on April jobs on Friday is likely to put more pressure on the Federal Reserve
The U.S. economy is likely to have added 978,000 jobs in April, the Bureau of Economic Analysis will report on Friday May 5, according to economists surveyed by Bloomberg. That would be up from March’s gain of 916,000 jobs and would be the biggest increase since...
Nothing in the Federal Reserve minutes released today to pause financial markets.
Nothing to see here. Move along. In the minutes from its March 16-17 meeting, released today April 7, Federal Reserve officials told the financial markets “that it would likely be some time until substantial further progress toward the [Open Market] Committee’s...
Bond traders speculate that the bond “lull” won’t last long–and that yields will spike again
Today April 6 the yield on the 10-year Treasury is down again–to 1.65%, a drop of 5 basis points. After looking like it was on a short path to breaking 1.90% and threatening 2.00%, the yield on the 10-year Treasury has been stuck in a range of 1.60% to 1.70%....
Market squares positions ahead of weekend, but doesn’t quite make up for yesterday’s losses as trend remains to the downside
The Standard & Poor’s 500 closed down 0.06% today, March 19. About as exciting as watching paint dry. The NASDAQ Composite, down yesterday, reversed that drop and a little bit more by adding 0.76%. The iShares MSCI Emerging Markets ETF (EEM), down 1.84%...
I almost forgot…the Federal Reserve meets on Wednesday
With everything going on, it’s easy to forget about the upcoming meeting of the Federal Reserve’s interest rate setting body, the Open Market Committee, on Wednesday. Which would be a mistake because, in my opinion, nothing is more important than interest...
The rotation gets extreme–Dow hits record intraday high while NASDAQ Composite falls into a correction
Two indexes will tell you what you need to know about today’s stock market action. The Dow Jones Industrial Average, driven by cyclicals, vaccine recovery stocks, and consumer stocks rose to an intraday record high. After a slight retreat at the end of the...
Don’t expect too much movement from stocks in the next couple of days–there’s just too much news due on Thursday and Friday
Stocks are neither moving ahead to follow up on yesterday’s big gains. Nor selling off under the wave of profit taking. Given the news calendar on Thursday and Friday that’s about what I’d expect. We’re due for a bushel of potentially...
Bond rally holds; stocks close on strong note
Treasury yields ended the day slightly lower (which means prices were slightly higher) than earlier in the day. The 5-year Treasury note, for example, ended with a yield of 0.69% after trading with a yield of 0.72% earlier in the day. (The low yield for the day was...
Stocks bounce back as bond prices take a breather and yields fall slightly
As of 2 p.m. New York Time today, March 1, the Standard & Poor’s 500 was up 2.57% and the Dow Jones Industrial Average was higher by 2.30%. The NASDAQ Composite had climbed 2.80% and the NASDAQ 100 had gained 2.83%. The small cap Russell 2000 had added...Jim’s Daily Email Alerts:
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