Weekly Market Update

With geo-political saber-rattling taking to the skies over Israel last night, reports that no major damage from the missile barrage has left the flight-to-safety trade wanting and Treasuries are on the back foot this morning. But with Israel pledging a retaliatory response the story is far from over. A somewhat positive ADP employment report (more…

With the Fed having moved the full employment mandate into the bus driver’s seat as to policy, this week will provide a raft of new employment data to ponder in the 25 or 50bps rate-cutting question. The headline will be Friday’s BLS jobs report for September but before then the Job Opening and Labor Turnover…

Treasury yields are a bit lower as the Fed’s preferred inflation measure came in slightly cooler than expected, but the YoY rate ticked up from 2.6% to 2.7% as tough base effects (a .008% MoM rolled off from last year) make YoY gains in the second half of this year challenging. On net, the report…

More Indications of Labor Market Weakness If you’re looking to check boxes on what could force another 50bps cut in November, you got one yesterday. The Conference Board’s September release showed a considerable slide in confidence (from 105.6 to 98.7) and while that rivals the 97ish prints in June and April, it was the labor…

Fed Speak Should Add Color to Last Week’s 50bps Cut  Treasury yields are under pressure as coming supply and early Fed speak is of the dovish variety which is increasing odds that the outsized rate cut last week may be followed by more. That increases odds that a recession, or material slowing, is avoided. The…

So, it was 50bps. What’s Next? Treasury yields are waffling around unchanged this morning, and with an empty economic docket for today investors are likely to keep the market rangebound. The large risk-on move yesterday in equities did bump yields higher, but after a brief foray above 3.75% 10yr yields fell back to the low…

Meeting Highlights  Well, the 25 or 50bps rate cut debate has been settled with the Fed cutting the funds rate by 50bps moving the target rate range to 4.75% – 5.00%.  The updated 2024 rate forecast, or dot plot, now sees nearly another 50bps in rate cuts in 2024 ending the year at 4.375%. That…

Will it be 25 Basis Points or 50? Treasury yields are backing up this morning as the market awaits the FOMC’s rate decision and updated forecasts this afternoon. The debate over 25 or 50 continues so the Fed’s decision will generate volatility but which way? Who knows, but the levels we see this morning aren’t…

Odds of a 50bp Cut Still Increasing  Treasury yields are waffling around unchanged this morning as the market awaits a Fed rate cut on Wednesday, the first since March 2020 (see graph below). The debate over 25 or 50 rages, but the 50 crowd is gathering some momentum and that is aiding Treasury bids in…

Late Financial Commentary Revives Hopes for a 50bp Cut  Treasury yields are lower this morning as the last of the week’s inflation numbers hit with August import/export prices cooler than expected, and late-breaking financial commentary that said the 25 or 50bp decision will, in fact, be a close call. So, the uncertainty is likely to…

The Sore Spots in Inflation Returned in August  Treasury yields are slightly higher this morning as August core CPI came in a bit hotter than expected, dashing hopes of a 50bps cut next week, and the usual sore spots, Owner’s Equivalent Rent and core services, returned as sore spots in August (more on that below)….

Market Rethinks Friday’s Reaction to the Jobs Report Treasury yields are grinding higher this morning as the fears Friday that a slowing jobs market may prompt a recession are given a more sober look today. A rebound in equities is occurring across the globe and stocks are opening higher here as the selling from Friday…