Last week gave us the July Inflation Data. Price increases are slowing down.
Last week gave us the July Inflation Data. Price increases are slowing down. Read More »
recession
“The source of the rise in the U.S. unemployment rate is not job cuts but a rise in labor supply”
The partial unwind of the Yen carry trade unleashed so much volatility that the Bank of Japan promised no further rate hikes during times of market turbulence. The Dollar has collapsed against the Yen. The BOJ’s intention was to support the Yen, but the Dollar collapse is really about U.S. debt and deficits.
“If you do not know what port you sail to, no wind is favorable.”
The S&P 500 touched yet another all-time high Friday at $5,505. It was up +0.6% on the week. The NASDAQ also hit another all-time high ($17,936) but could not break the big round number of $18,000 in two attempts. It was flat on the week. Friday was “Triple Witching” Options expiration – over $5t in options expired.
“If you do not know what port you sail to, no wind is favorable.” Read More »
“It was the best of times, it was the worst of times…”
The economy is growing slowly and inflating quickly, which presents significant challenges to the economy, to unprofitable and indebted sectors of the market, and eventually to the government – but not at least until the election.
Heightened uncertainty, rising volatility, and rising indebtedness exert tremendous financial stress on broader portions of the economy. The government won’t let it break until after the election.
Perry Capital has anticipated rising inflation, which is helping corporate profitability, but, to date, has not resulted in higher yields –– although credit spreads are beginning to widen in weaker credits. Expect more.
“It was the best of times, it was the worst of times…” Read More »
“There is an inevitable divergence, attributed to the imperfections of the human mind, between the world as it is and the world as men perceive it.”
Stimulus remains ample, and Mr. Powell was more dovish than even the most strident risk asset bulls anticipated. Government activism in the economy and capital market and economy remain and are accelerating.
The performance of the U.S. equity and credit markets is excellent, and they are aggressively testing the Fed, which doesn’t see the threat unless, of course, they see something that we don’t. Three cuts are still expected in 2024. Stocks should remain encouraged but for how long?
“In this new global environment, policymakers, even those previously in the ‘lower forever’ camp…”
Interest rates drive everything, and they are as volatile and directionally uncertain as they’ve ever been. So are the global macroeconomics driving them. Global fund managers are required to make bets on outcomes for stocks, currencies, and commodities based on the cost of money. If perspectives on rates are so dispersed, how can we judge the value of the things that are driven by them?
Markets need to figure out a normalized level of interest rates appropriate to this volatile new era …
Markets need to figure out a normalized level of interest rates appropriate to this volatile new era of De-globalization, rising military engagement, heightened Geopolitical tensions, excessive indebtedness, and the irrational rise in deficit spending.
“There’s no money. There’s no money. If we don’t make a fiscal adjustment, we’re headed for hyperinflation…”
Markets need to figure out a normalized level of interest rates appropriate to this volatile new era of De-globalization, rising military engagement, heightened Geopolitical tensions, excessive indebtedness, and the irrational rise in deficit spending.
“If someone tells you that you are the smartest person in the room…”
5% of my T-Bill exposure matured. My proceeds were a tiny portion of the $508b that migrated to money
market funds in the first quarter. The “Liquid” portfolio position remains at 50%.
“If someone tells you that you are the smartest person in the room…” Read More »