Yes, Interest Rates Can Go Negative

Many Americans believe interest rates cannot go negative in the U.S., even though government debt in many other nations is already paying a negative yield. It is not an easy concept to grasp since it makes little sense why an investor would lend money to the government knowing they will receive less back when the … Read more

Market Brief – Friday 8/30/19

The broad equity indices “gapped” over resistance as the computer algorithm gave bullish investors the boost they were looking for. Sellers were dominant in early trading, which provides validation for the strong level of overhead resistance. Treasury yields also started the day slightly higher but have been unable to gain any traction as buyers stepped … Read more

Market Brief – Thursday 8/29/19

Investors were thrilled this morning as China decided not to further escalate the trade war and will be focusing on ending the dispute. China is working on preparations with the U.S. for the next trade meeting, which sent stock prices higher. It is worth noting, investors are not bidding stocks up on both sides discussing … Read more

Market Brief – Wednesday 8/28/19

Stocks and Treasury yields started the morning lower and the equity Bulls came in early to push the market higher. Mortgage applications fell to their two-year low despite lower mortgage rates as purchase application fell -6.2% from last week. Saudi Arabia stated they would cut crude oil exports to the U.S. by fifty percent and … Read more

Market Brief – Tuesday 8/27/19

U.S. equity futures jumped in overnight trading as computer algorithms looked to keep the equity rally going. The overnight ramp was quickly faded as investors sold in early trading. Treasury yields completely ignored the overnight equity ramp as yields fell in early trading and erased all of yesterday’s gains. To note, 2-year Treasury yields are … Read more

Market Brief – Monday 8/26/19

Friday after U.S. markets closed, President Trump announced an increase to the Chinese tariffs. The overnight futures market didn’t like the tariff increases and showed an expected dump in stocks upon the reopening of the futures market on Sunday afternoon. Almost as quick as the trade wars escalated, investors bought back into stocks when President … Read more

Recessions Aren’t What You Think

By definition, a recession is a decline in output, or GDP growth, over two successive quarters. The evidence of a recession is seen in a decline in industrial output and trade. Most people view a recession as a time when their investments and property fall in value, their job may be in jeopardy and their … Read more

Market Brief – Friday 8/23/19

In overnight trading, U.S. equities quickly rebounded from yesterday’s losses as the markets looked forward to a dovish speech from Fed Chair Powell this morning. Instead of seeing green on their trading screens, investors were seeing red after China pulled a President Trump-like move by announcing additional tariffs shortly before the U.S. markets opened. China … Read more

Market Brief – Thursday 8/22/19

Stocks started the morning higher as securities dealers continue to back out of their volatility hedges as mentioned in yesterday’s update. Treasury yields also moved higher in early trading as volatility fell. Both moves were short-lived when FOMC non-voting member Harker said he didn’t see a need for further rate cuts as he believes the … Read more

Market Brief – Wednesday 8/21/19

Stocks leaped higher in pre-market trading and volatility fell sharply, not from any good economic news or good trade news, but from securities dealers unwinding their volatility hedges. Recently, an unknown trader bought a large number of volatility call options which forced dealers to hedge against those positions. As those options contracts reach their expiratory … Read more