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Why QE Does Not Work

Even though the Federal Reserve does not have the power to raise asset prices, investors continue to cram into stocks since they believe the Fed has some mythical power to raise stock prices. The psychological effects of Quantitative Easing (QE) are all the Fed needs since it has brought investors back into the market who … Read more

Market Brief – Friday 5/15/20

Stocks and Treasury yields headed lower in overnight trading after the trade with China appears to be heating back up. Crude oil was unphased as crude prices continue to rise, indicating the supply and demand issue from last month is over. Even if it is, crude oil at current prices will not save the U.S. … Read more

Market Brief – Thursday 5/14/20

Stocks and Treasury yields started the day lower after investors were uneasy following an interview with President Trump where he stated he could “cut off the whole relationship” when referring to China. Crude oil traded higher ahead of the June contract expiry next Tuesday where 170 million barrels of crude oil are expected to be … Read more

Market Brief – Wednesday 5/13/20

Stocks and Treasury yields were mostly unchanged from last night’s close despite producer prices deflating last month. Fed Chair Powell failed to inspire confidence this morning when he spoke via webcast to the Peterson Institute for International Economics, where many expected him to address the Fed taking the funds rate into negative territory. Mortgage applications … Read more

Market Brief – Tuesday 5/12/20

Stocks started the day slightly higher after the Fed announced it will begin its junk bond ETF buying today. These bonds are not going on the Fed’s balance sheet, but in a Special Purpose Vehicle to be sold later as the Fed looks to inject more liquidity into the financial system. Treasury yields were down … Read more

Market Brief – Monday 5/11/20

Stocks were mixed in early trading with most in the red except the tech-heavy Nasdaq. Treasury yields were higher in early trading and rose to close an overhead gap from last week. Crude oil was higher after Saudi Arabia cut an additional 1 million barrels per day of production after it announced significant budget cuts. … Read more

Market Brief – Friday 5/8/20

Stocks rose in overnight trading after trade talks between China resumed with both sides committed to honoring the first phase of the trade deal. While investors remain optimistic, China was not in a position to honor the trade deal, and with global trade at a standstill, it is even less likely they will be able … Read more

Market Brief – Thursday 5/7/20

Stocks rallied in overnight trading after President Trump threatened to pull out of the Phase One trade deal due to China threatening to dump its holdings of Treasury securities and after Saudi Arabia cut its discount on crude oil. Treasury yields also fell in overnight trading, but sellers emerged ahead of the U.S. open to … Read more

Market Brief – Wednesday 5/6/20

Stocks rose in overnight trading even as the economic data coming out of Europe was horrible. Stocks even brushed off the massive jump in the ADP payroll report. Treasury yields rose to the top of their multi-month trading range after the U.S. Treasury announced next week it would issue a record amount of debt. Next … Read more

Market Brief – Tuesday 5/5/20

Stocks rallied in overnight trading as investors continue to bet the reopening of the U.S. economy will lead to a huge surge in growth. Treasury yields also rose in overnight trading as investors also bet the reopening will be inflationary. Despite huge on- and off-shore inventories, investors are also betting on a huge increase in … Read more