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Market Brief – Tuesday 8/31/21

Stocks fell in overnight trading but investors were not phased as they eagerly bought the dip. Treasury yields dipped slightly in overnight trading only to find sellers who drove yields higher in early trading. Home prices rose +1.6% in July and +18.8% from this time last year. The Chicago PMI showed the manufacturing sector in … Read more

Market Brief – Monday 8/30/21

Absent any major news over the weekend, stocks rose in overnight trading and continued higher in early trading. Treasury yields rose in overnight trading but fell in early trading. Pending home sales fell -1.8% in July and -9.5% from this time last year. The Dallas Fed Manufacturing Index missed expectations by falling from 27.3 to … Read more

The Fed’s Brilliant Solution

There is a major shortage of collateral, or short-term Treasury Bills to the tune of over a trillion dollars a day. The U.S. Treasury is not making much of an effort to solve this problem by issuing a sufficient amount of Treasury Bills. Without support from the U.S. Treasury, the problem of the collateral shortage … Read more

Market Brief – Friday 8/27/21

Stocks rose and Treasury yields fell in overnight trading as investors awaited Powell’s Jackson Hold speech. Stocks rallied on the news the Fed may taper this year and Treasury yields held their overnight decline. Personal Consumption Expenditures (PCE) rose +0.4% in July and +4.2% from this time last year. Excluding food and energy, Core PCE … Read more

Market Brief – Thursday 8/26/21

Stocks slid in overnight trading while Treasury yields rose. News of explosions in Afghanistan sent stocks and Treasury yields a bit lower in early trading. Initial unemployment claims rose to +353k last week despite a record number of job openings. Total claims, including all forms of Pandemic Unemployment Assistance, rose +182k to 12.008 million. The … Read more

Market Brief – Wednesday 8/25/21

Stocks rose slightly in overnight trading and were a bit higher in early trading. Treasury yields rose in overnight trading and were slammed further higher in early trading as investors believe it is bond bearish if the Fed does not announce a taper on Friday. Mortgage applications rose +1.6% last week with purchase applications rising … Read more

Market Brief – Tuesday 8/24/21

Stocks rose in overnight trading while Treasury yields reversed yesterday’s decline in overnight trading. Stocks continued to rise in early trading while Treasury yields were fighting back against their overnight decline in early trading. New home sales rose +1.0% in July but crashed to -27.4% from this time last year. The Richmond Fed Manufacturing Index … Read more

Market Brief – Monday 8/23/21

Stocks ripped higher in overnight trading and continued higher in early trading as the market appears to be back in reflation mode. Treasury yields rose in overnight trading and were fading their overnight move in early trading. The Chicago Fed National Activity Index surged higher in July from a reading of zero the prior month … Read more

History of Monetary Policy

In the 1940s as World War 2 was ending and the world agreed to make the dollar the new reserve currency, the Federal Reserve was engaged in a battle to keep interest rates low. To accomplish their goal, the Fed fixed short-term and long-term rates, then engaged in massive open-market operations, or what we refer … Read more

Market Brief – Friday 8/20/21

Stocks fell slightly in overnight trading but U.S. investors were on the bid early driving stock prices higher. Treasury yields fell slightly in overnight trading and were flat in early trading. Traders are on their own today as there is no economic news to drive the tape today. Stocks closed higher and Treasury yields a … Read more