The Fed is Buying Coupons

Over the past few years, I have written about how the Federal Reserve will ultimately cause the recession they are desperately trying to avoid by driving Treasury yields lower. After nearly four months of buying short-term Treasury Bills, the Fed recently started purchasing Treasury Notes since the supply of T-Bills has run out. While the … Read more

Market Brief – Friday 1/31/20

Stocks started the day lower and were looking to unwind yesterday’s late-day ramp while Treasury yields were falling looking to unwind yesterday’s late-day ramp after two European countries posted negative GDP growth for the fourth quarter and concerns about the Coronavirus returned. Personal income rose +0.2% in December and +3.9% from this time last year. … Read more

Market Brief – 1/30/20

Stocks started the day lower on growing fears the Coronavirus is spreading while Treasury yields fell in a risk-off move. Crude oil was hit hard as it traded around $52 per barrel, which brought energy stocks down with it. Fourth-quarter GDP growth came right in as expected at 2.1%. Sales rose to +3.2%, while the … Read more

Market Brief – Wednesday 1/29/20

Stocks started the day higher as investors are hoping the Fed will further ease monetary policy to offset the expected global economic slowdown from the Coronavirus outbreak. Treasury yields rose in overnight trading, but fell before markets opened after the December pending home sales data was released prior to the market opening. Despite a small … Read more

Market Brief – Tuesday 1/28/20

Investors brushed off yesterday’s fears as stock prices rose in early trading on decent volume. Treasury yields rose in early trading after trading flat in overnight trading with 30-year Treasury yields confirming overhead resistance at their 2016 lows. After trading in the $52 per barrel range last night, crude oil rebounded into the mid-$53 per … Read more

Market Brief – Monday 1/27/20

Stocks were a sea of red this morning as concerns the Coronavirus is spreading and will lead to even lower global economic growth in the months ahead. Treasury yields fell to their four-month lows as investors looked to add some portfolio insurance. Crude oil, along with oil and gas producing stocks, were hit the hardest … Read more

How the Fed Engineered Massive Stock Speculation

In October 2019 Federal Reserve Chairman Jerome Powell announced the Fed would immediately begin purchasing $60 billion per month of short-term U.S. Treasury Bills. While investors cheered the return of Quantitative Easing, Powell cleared stated in his press release this was not Quantitative Easing since it was designed to restore dollar liquidity to the banks. … Read more

Market Brief – Friday 1/24/20

Stocks jumped in overnight trading to open at new all-time highs but quickly sold off in early trading as reports the Coronavirus is spreading. Treasury yields moved higher in overnight trading, but quickly reversed and continued to fall in early trading with 10-year Treasury yields breaking below a key support level at 1.7%. Crude oil, … Read more

Market Brief – Thursday 1/23/20

Stocks fell slightly in overnight trading and while they traded lower in early trading, buyers were attempting to push prices higher. Thirty-year Treasury yields broke through support in overnight trading, triggering a short squeeze and a rally in bond prices. Crude oil traded lower in overnight trading, but today’s crude oil inventory report helped prices … Read more

Market Brief – Wednesday 1/22/20

Stocks moved higher in overnight trading when President Trump stated the Coronavirus was contained, but elsewhere there have been 440 confirmed cases with 9 dead and 1,394 under observation. Treasury yields fell below their respective 100-day moving averages in early trading, although investors attempted to push yields higher to prevent a massive short squeeze that … Read more