The probability of rate hikes is actually on the rise.
The probability of rate hikes is actually on the rise. Read More »
Government stimulus
“No amount of sophistication is going to allay the fact that all your knowledge is about the past and all your decisions are about the future.”
The extreme performance divergence between sectors on the receiving side of the stimulus is stunning. The businesses best positioned to benefit from spending by the upper and upper-middle class are thriving — just look at the share prices of your favorite credit card company; they are at all-time highs. Those most sensitive to interest rates and, thereby, the worst positioned for tight monetary policy are or soon will be flirting with bankruptcy. If you look at commercial real estate owners and their lending banks, you’ll see that their share prices are at all-time lows.
“Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth.”
Economic data continues to surprise to the upside; the Citi surprise index was up again from last week (44.10 vs 39.0) and the January lows (0). It is above pre-pandemic levels, and the labor market is stronger, too. Unemployment is 3.7%, with claims falling and the number of available jobs rising.