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Initial claims for regular state unemployment insurance decreased by 23,000 for the week ending January 29, coming in at 238,000. Continuing claims in all federal programs totaled just 71,155 for the week ending January 15, a drop of 9,744. Despite some volatility over the last fe...
We believe that the CPI has flaws in estimating the inflation rate. The Phillips Curve helps us to understand only the past. Financial markets seem to have overreacted in their fear of the Fed. For further details see: Phillips Curves And The Fed
We are emerging from a period of unprecedented fiscal and monetary stimulus which flooded the markets with liquidity. Now this liquidity is slowly being withdrawn, as the Fed seeks to combat inflation. As we move from a period of low inflation and excess liquidity to one with modest o...
They expect yields to rise, as the big central banks pivot from buying around US$3.5 trillion of bonds per year, to around half a trillion dollars this year. They remain constructive on equity markets in general. Short term, the market is most concerned about inflation and wage gr...
Despite the strong two-day rally to finish the month, January was the worst start to the year for the Nasdaq (down 19% peak to trough) since 2008. As a result, you might have thought that the decline would have made some progress in normalizing valuations but you would have been wrong...
The markets and the eight-figure Wall Street sell-side economists all believe that the Fed is about to embark upon an aggressive course of rate hikes. A total of seven rate hikes would place the Fed funds (overnight) in a range of 1.75-2.00%. The Fed is promising to start hiking t...
Markets have been blissfully ignoring the threat of monetary policy tightening, until now. Global equities are down 5-to-10% month-to-date in January, and the yield curve is flatter. What comes next? This week has been dominated by a discussion market participants will be familiar wit...
If Fed Funds are raised, then bonds go down, stocks go down, mortgage rates go up and housing prices go down. The rest of the decade is going to be very low interest rates and tons of money printing. This is the path to a major debt crisis. For further details see: Fed M...
While special-purpose acquisition companies (SPACs) have been around for decades, they have attracted unprecedented interest and investment since the first wave of the COVID-19 pandemic. A SPAC, or blank check company, is a publicly-traded corporation created to facilitate a merger, a...
The goal of the DDM is to quickly and easily utilize available resources of an asset to understand what the intrinsic value of that asset is based on certain market and company expectations. If the required return component of the equation rises without expectations of higher company ...