Fourth-quarter GDP data came in higher than expected at 2.60%, although the BEA stated this number was based on estimates, as they don’t have the full set of data to determine the actual number. Estimates from the Atlanta and New York Fed indicate the actual number should be lower. GDP growth in 2018 slowed from … Read more
Stocks started the day lower as 2,790 to 2,816 remains stiff resistance where sellers have continued to sell for the past twelve months. Treasury yields fell in overnight trading and were flirting with a breakdown of support, which would have sent yields lower. Short sellers resumed selling to press yields higher, even though the two … Read more
Equity futures flashed red in overnight trading as stocks and Treasury yields fell. As the U.S. market opened, investors were quick to try to bid stocks and yields higher, but quickly ran into a wall. December Housing Starts fell -11.2% MoM, which is being blamed on the government shutdown, even though the shutdown probably didn’t … Read more
Asian markets celebrated what appears to be the end of the trade war and a victory by China. Asian investors bought stocks, bonds, and agricultural commodities on the news that the Trump Administration will not be increasing the tariffs on March 1st. Since the Trump Administration started the trade war, the Chinese trade deficit has … Read more
Most people are blaming the recent economic slowdown on the U.S. and China trade spat when the real culprit is World Dollar Liquidity. The litmus test for blaming World Dollar Liquidity on the slowdown is evident by the number of economies that are slowing down. It’s not just China, but South Korea, Japan, Australia, Canada … Read more
U.S. stocks have completely diverged from the recent global economic data that shows the global economy is quickly slowing down. Even Treasury yields, which once rose alongside stocks, continue to inch their way lower. Based on Treasury yields and the economic data, U.S. stocks are headed in the wrong direction. Wall Street remains ever optimistic … Read more
U.S. futures and Treasury yields moved higher in overnight trading as news broke of a potential outline to end the trade war between the United States and China. While the computer algorithms were busying driving equity prices higher, the actual news is there are six memoranda of understandings being drafted. Memoranda of Understandings (MOUs) are … Read more
U.S. equities and Treasury yields headed higher on hopes that today’s release of the January Federal Open Market Committee’s meeting notes will show a very dovish Fed, but equities and yields didn’t go too much higher. Since the Fed has not made any adjustments to their balance sheet unwind, outside of talking the stock market … Read more
The economic data out of Asia and Europe is accelerating to the downside, which caused U.S. equity futures to start trading in the red. Fortunately, President Trump tweeted that stocks were headed much higher and the trade deal with China will be concluded shortly, which gave investors confidence to continue buying stocks. Over the weekend … Read more
For governments, the only two solutions to a debt problem are economic growth or currency-printing which inflation, because the third option—a sovereign debt default—is typically frowned upon. Give the choice between economic growth and currency-printing inflation, growth is often the preferable path. However, governments and central banks lack the knowledge and ability to create growth, … Read more