Will Biden’s Stimulus Be Inflationary?

Most investors believe President Biden’s $1.9 trillion stimulus plan will be inflationary, even though past stimulus plans were not. Former President Trump’s tax cuts, an indirect form of stimulus, were also believed to be inflationary and they were not. The pandemic stimulus turned out not to be inflationary and so far, the December 2020 stimulus … Read more

Market Brief – Friday 4/9/21

Stocks were mostly flat in overnight trading and trying to claw higher in early trading. Treasury yields rose in overnight trading as sellers continue to strongly defend 2.3% but buyers were fighting back as yields reversed their overnight ramp in early trading. The Producer Price Index rose +1.0% in March and shot up to +4.2% … Read more

Market Brief – Thursday 4/8/21

Stocks rose in overnight trading but were struggling to hold their overnight gains in early trading. Treasury yields reversed yesterday’s ramp in overnight trading but were fading those declines in early trading. Initial claims for unemployment benefits remained above seven hundred thousand as +744k Americans filed for benefits last week. Total claims, including all forms … Read more

Market Brief – Wednesday 4/7/21

Stocks were down slightly in overnight trading but investors were lined up for the opening bell as stocks rose in early trading. Treasury yields dipped slightly in overnight trading and were slowly trending lower in early trading. Mortgage applications fell -5.1% last week as purchase applications fell -4.6% and refinance applications fell -5.3%. Exports fell … Read more

Market Brief – Tuesday 4/6/21

Stocks and Treasury yields started the day slightly lower. Stocks were nudging higher in early trading and Treasury yields were heading lower as once again 30-year Treasury yields have their sights on 2.2%. Redbook same-store weekly brick-and-mortar retail sales fell -17.2% from this time last month and rose +10.6% from this time last year. The … Read more

Market Brief – Monday 4/5/21

Stocks were in full-on rally mode following the holiday weekend as investors believe a big payroll report will lead to a huge boom in consumption. Following the same news, investors believe strong payroll numbers will lead to higher interest rates even though there is an inverse correlation between payrolls and yields. After touching 2.4% in … Read more

Macrovoices Notes

The purpose of Quantitative Easing is to strengthen the dollar and lower Treasury yields by purchasing large quantities of government debt and trapping dollars in the financial system. Without lending growth, Quantitative Easing is disinflationary and potentially deflationary, until lending growth is large enough to overcome the negative effects of Quantitative Easing. It is the … Read more

Market Brief – Friday 4/2/21

While the stock market is closed for Good Friday, the overnight futures market was briefly open this morning as the Nonfarm payroll report was scheduled for release. Stocks were up slightly after the report and Treasury yields rose as experts and analysts have been indicating yields would spike considerably after today’s report in hopes computer … Read more

Market Brief – Thursday 4/1/21

Stocks gapped higher in overnight trading and Treasury yields fell in overnight trading as the persistent selling of Treasury securities from Japanese commercial banks appears to have ended. Stocks were in rally mode in early trading and yields were continuing to head lower. Initial claims missed expectations as +719 Americans filed for unemployment benefits last … Read more