It’s the last day of a short week packed with more important economic data — which the market has managed to ignore so far. Today might be a little different, as the spike in the savings rate and the collapse in consumption confirm a troubled road ahead for the strong consumer narrative. Gee, could 25% … continue reading →
It’s a day we all knew was coming — over 1 million cases of coronavirus cases officially diagnosed in the US, over 3 million worldwide. Experts such as Scott Gottlieb, former head of the FDA, estimate that actual US cases are 10 to 20 times the reported figure. Deaths currently stand at 56,803 – about … continue reading →
In our last formal update on gold in January [see: Jan 2 Update on Gold] with GC trading at 1529, I noted that although DXY had held up well, gold should benefit from loose Fed policy – but could see a backtest of its SMA200 based on the oil/gas meltdown we expected. I am partial, … continue reading →
The futures are lock limit down again this morning, with ETFs trading in the after-hours indicating losses on the (eventual) open of up to 10%. This is probably not what the Fed had in mind when they unleashed the massive, emergency rate cut and $700 billion in new QE an hour before the futures opened … continue reading →
After weeks of gathering clouds, the storm we’ve been watching has finally arrived. S&P futures are lock limit down just a few points above our next downside target. Not surprisingly, all of our other targets across currencies, commodities and fixed income have either tagged or exceeded our next downside targets, with more to go once … continue reading →
Futures are higher this morning on what is expected to be a non-event FOMC announcement and press conference. I suspect attention will again return to currencies, as the US dollar’s surge over the past month, combined with the big drop we had anticipated in oil and gas, will serve to tamp down inflation fears. Of … continue reading →
It was October 1989 and the stock market was in trouble. Two years after crashing 36% (including 20% in a single session) the S&P 500 had made a comeback and had climbed back to new all-time highs. But high inflation, slipping junk bond prices and failing S&Ls were in the headlines daily. On October 13, … continue reading →
Inflation drives interest rates. Though the Fed probably wishes it didn’t, it’s an inconvenient truth. There are much tighter correlations, but consider the strong positive correlation between CPI and 10Y notes. This matters, of course, because with $22 trillion in debt, the US faces the same problem as the ECB and Japan: High interest rates … continue reading →
Today is off to an interesting start. Following Trump’s call for negative interest rates and more grandstanding on China in New York yesterday, headline CPI came in hotter than expected but right in line with our forecast. As we’ve discussed, this is the result of oil and gas trending sideways in support of the upcoming … continue reading →
It’s not too surprising that there’s been a firm floor under oil and gas prices, given the upcoming Aramco IPO. But, isn’t it funny how CL has popped above its SMA200 every single day this week, even in the wake of dismal inventory data? Just like it’s funny that ES, which pretty obviously should have … continue reading →