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October 17, 2018

Yields Rise Following Release of Fed Minutes

 

FOMC Minutes

Today the Fed released the minutes from its September 25th-26th meeting in which the Committee made the decision to hike its benchmark borrowing rate to a target range of 2.00%-2.25%.  The primary areas detailed within the text included:
 

  • Removal of the phrase “policy was accommodative” from the statement.  The change wasn’t meant to signify that the current level of rates wouldn’t spur growth, rather the Fed would like to reduce the amount of precision conveyed by the Committee.  

  • ...

October 16, 2018

Equities Bounce Back After Strong Earnings

 

Corporate Earnings Support Stocks

US equity markets were able to bounce back during today’s trading session as investors received a batch of strong quarterly earnings reports.  The tech-heavy Nasdaq posted the largest gain among major indices (+2.89%), while the DJIA experienced its largest one-day rally since March, adding 548 points (+2.25%).

 

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October 15, 2018

Stocks Struggle, Oil Rises with Heightened Geopolitical Tensions

 

Stocks Back in the Red

Today US equity markets finished with losses for the third time in the past four trading sessions.  The tech sector fared the worst, with the Nasdaq finishing down 0.88%, while the S&P 500 and DJIA had more limited losses at -0.59% and -0.35%, respectively.  US Treasurys held within a tight range throughout the day, as the 10-year note yield closed near unchanged at 3.155%.  In commodity markets, WTI crude oil futures settled 0.62% higher to $71.78/barrel as heightened Saudi Arabian political tensions outweighed concerns regarding...

October 11, 2018

Stocks Resume Selloff Despite Cooling Inflation

 

Another Day, Another Drop

US equity markets had themselves another volatile day as the S&P 500 and DJIA each declined more than 2%, while the tech-heavy Nasdaq (-1.25%) managed to limit losses to some extent.  Today’s worst performers were in the energy sector, where stocks slid 3%. 

 

October 10, 2018

Stocks Plummet as Higher Rates Scare Investors

 

The Good, the Bad and the (very) Ugly

This morning financial markets received a positive inflation print via the Labor Department’s report on U.S. business prices.  After failing to increase in both July and August, the producer-price index rose a seasonally adjusted 0.2% in September, matching expectations.  Excluding food, energy, and trade services, producer prices climbed a more robust 0.4% - the largest monthly rise in core prices since January of this year.  Compared to a year earlier, the overall PPI index recorded a 2.6% gain (with the core at +2.9...

October 9, 2018

Stocks, Yields Fluctuate with Global Uncertainty

 

Caution in Financial Markets

US equities held within a tight range today as investors continued to grapple with the uncertainty of economic growth prospects alongside this past week’s rise in rates.  The S&P 500 (-0.14%) declined for a fourth straight session, weighed down largely by the materials sector which posted its biggest daily loss in the past eight months.  US Treasury yields briefly rose to a new seven-year high before reversing course later in the day.  Yields/swap rates finished the trading session 1-4bps lower across the curve in a bull...

October 5, 2018

Jobs Report Keeps Fed on Track

 

Jobs Day

There was a lot to digest in today’s release of the September nonfarm payrolls report.  At first glance, the headline number appeared to disappoint, as the 134,000 print came in well below the 185,000 consensus estimate.  However, the market took the number in stride, instead focusing on the drop in unemployment rate to 3.7% (the lowest since 1969), and the 0.3% growth in average hourly earnings.  Hurricane Florence likely affected the headline number, and when you factor in the 69k upward revision to the August figures, the report was clearly net...

October 4, 2018

Stocks Spooked by Rising Rates

 

Bond Prices Down, Stocks… Also Down?

US equities retreated today from their recent historical highs as surging bonds yields stoked fears of a global tightening of liquidity / monetary policy.  The recent bond sell off comes off the back of strong underlying US economic data and hawkish comments from Fed Chair Powell ahead of tomorrow’s release of the widely-followed nonfarm payrolls report.  Investors will be watching with a keen eye for any signs of a job-driven inflationary pressure, which to this point has remained subdued despite a labor market that’s...

October 3, 2018

Risk On After ADP and Italy News

 

Jobs Report Too Hot?

Today’s release of the ADP Employment Report showed job growth surged in September, easily beating economists’ expectations.  The report showed private companies added 230,000 jobs last month, the highest total since February, which also represented a 62,000 increase from August.  Gains were robust, with the professional and health services sectors leading the way.  It should be noted that the number may be overstated some because the ADP’s methodology ignores some of the likely job disruptions from Hurricane Florence.  Regardless, the...

October 2, 2018

Financial Markets Mixed as USMCA Excitement Fades

 

Goldilocks Not Unrealistic

Earlier today, Fed Chair Jerome Powell reiterated the views communicated by the FOMC at the conclusion of its meeting last week.  Specifically, he supported the notion that consumer price growth would remain near the Fed’s target (2%) and not overheat, despite persistently low unemployment and rising wages – a perspective that Powell stated “is not too good to be true”, contrary to the beliefs of several market pundits.  The Fed maintains a “remarkably positive outlook” and believes that we will “remain in extraordinary times”....

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