The Year in Review: 2023

These annual reviews are always interesting. This past year of charting, like most, saw some enormous successes as well as some lessons in humility.  More importantly, though, the markets’ behaviour in 2023 offers vital insight into the year ahead. Equities As we noted back on Jan 10, 2023 in A Look Ahead at 2023, the … continue reading →

FOMC Day: Jul 26, 2023

Equities have ramped almost 12% since the last Fed meeting – ignoring the prospect of higher interest rates for a longer period of time. Given the oil market’s recent breakout and the obvious base effect on inflation, we see a good chance of Powell presenting a more hawkish stance than the overbought market is prepared … continue reading →

Powell: Inflation Not Over

“Inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go,” Powell asserted in prepared remarks in advance of his testimony before the House Financial Services Committee. Our charts certainly agree. As posted last week, there is little chance of inflation not bouncing back … continue reading →

Stocks vs Bonds

The OPEX meltup continued overnight, with futures up modestly to new 9-month highs. Powell speaks at 11am ET and might shed some light on the implications of treasury yields which have pushed to new cycle highs – reflecting a much more cautious assessment of the debt ceiling negotiations. continued for members… … continue reading →

Jawboning an OPEX Rally

Yesterday’s 1.2% spurt higher was driven not only by the usual push in USDJPY and plunge in VIX, but a healthy dose of hopium regarding the debt ceiling crisis. Congressional and White House reps were nearly unanimous in declaring that a deal is as good as done. Whether they’re speaking the truth or simply trying … continue reading →

Debt Ceiling Worries

We’re starting to see cracks in the equities and bond markets related to the debt ceiling. Interest rates are ratcheting higher. And, although OPEX-related maneuvers are working to prop up stocks, we had a momentary breakdown in SPX yesterday. Utilities, a bond proxy for some, have taken a big hit this week as investors shift … continue reading →

Jobless Claims Pile On

Job cuts rose to 228K (vs 200K expected) last week. It will officially register as a drop, however, as the previous week was revised from 198K to 246K.  When viewed through the prism of new highs in bankruptcies and an earnings implosion… …it’s not too surprising that futures are drifting lower. continued for members… … continue reading →

On the Bubble

Our yield curve model sounded the alarm on Friday. But, by the end of the day, it had backed off and cooler heads prevailed. It’s important to recognize, however, that it remains on the bubble, with only a few basis points standing between a rally and another leg down. From a fundamental standpoint, there seems … continue reading →