Tag Archive: commodities

Market Pulse: Mid-Year Update

Note: This update is longer than usual but I felt a comprehensive review was necessary. The Federal Reserve panicked last week and spooked investors into the worst week for stocks since the onset of COVID in March 2020. The S&P 500 is now firmly in bear market territory but that is a fraction of the pain in stocks and other risky assets.

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It’s Not Nothing, It’s Everything (including crypto)

Markets got aggressive long before the FOMC did. Everything, and I mean everything, has been trending the other way. Jay Powell says inflation risks are most pressing when markets have consistently priced the opposite for a whole lot longer.

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Weekly Market Pulse: Is The Bear Market Over?

Stocks had a rip snorter of a rally last week and a lot of people are pondering the question in the title over this long weekend. The S&P 500 was down 20.9% from intraday high (4818.62, January 4th) to intraday low (3810.32, May 20th). From that intraday low the market has risen 9.1% in just six trading days.

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Is It Being Demanded?

Shipping container rates have been dropping since early March – right around the time when we had just experienced our “collateral days” and then stood by to witness chaotic financial fireworks, inversions, the whole thing.

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Central Banks…Why Bother?

Central banks…why bother? Inflation is here and it cannot be contained. US inflation is touching a 40-year high, the UK has hit the 40-year high, and the EU’s has already hit an all-time high.

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Weekly Market Pulse: TANSTAAFL

TANSTAAFL is an acronym for “There ain’t no such thing as a free lunch”. It has been around a long time – Rudyard Kipling used it in an essay in 1891 – but it was popularized by Robert Heinlein’s 1966 book, “The Moon is a Harsh Mistress”.

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Industrial Synchronized Demand

Are the industrial commodities starting to get a whiff of demand side rejection? Short run trends suggest that this could be the case. From copper to iron and the highest (formerly) of the high flyers, aluminum, this particular group has been exhibiting a rather synchronized setback going back to the end of March, start of April.

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Weekly Market Pulse: Welcome Back To The Old Normal

Stagflation. It’s a word that strikes fear in the hearts of investors, one that evokes memories – for some of us – of bell bottoms, disco, and Jimmy Carter’s American malaise. The combination of weak growth and high inflation is the worst of all worlds, one that required a transformational leader and a cigar-chomping central banker to defeat the last time it came around.

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I Told You It *Wasn’t* Money Printing; How The Fed Helped Cause, But Can’t Solve, Our Current ‘Inflation’

Trust the Fed. Ha! It’s one thing for money dealers to look upon Jay Powell’s stash of bank reserves with remarkable disdain, more immediately damning when effects of the same liquidity premiums in the real economy create serious frictions leaving the entire world exposed to the consequences. When all is said and done, the Federal Reserve has created its own doom-loop from which it won’t likely escape.

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Weekly Market Pulse: What Now?

The yield curve inverted last week. Well, the part everyone watches, the 10 year/2 year Treasury yield spread, inverted, closing the week a solid 7 basis points in the negative. The difference between the 10 year and 2 year Treasury yields is not the yield curve though. The 10/2 spread is one point on the Treasury yield curve which is positively sloped from 1 month to 3 years, negatively sloped from 3 years to 10 years and positively sloped again...

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Weekly Market Pulse: The Cure For High Prices

There’s an old Wall Street maxim that the cure for high commodity prices is high commodity prices. As prices rise two things will generally limit the scope of the increase. Demand will wane as consumers just use less or find substitutes. Supply will also increase as the companies that extract these raw materials open new mines, grow more crops or drill new wells.

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Weekly Market Pulse: Is This A Bear Market?

I don’t know the answer to the question posed in the title. No one does because the future is not predictable. I don’t know what will happen in Ukraine. I don’t know how much what has already happened there – and what might – matters to the US and global economy. I don’t know if the Fed is making a mistake by (likely) hiking interest rates by an entire 1/4 of 1% this week.

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Weekly Market Pulse: Oil Shock

Crude oil prices rose over 25% last week and as I sit down to write this evening the overnight futures are up another 8% to around $125. Almost every other commodity on the planet rose in prices last week too, as did the dollar. Those two factors – rising dollar and rising commodity prices – mean the likelihood of recession in the coming year has risen significantly in just the last week.

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Weekly Market Pulse: Are We There Yet?

I’ll just get this out of the way right at the beginning. The question in the title of this post refers to the end of the ongoing stock market correction and the answer is likely no. There are no sure things in this business so it isn’t an unequivocal no, but based on history, the odds favor more weakness.

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Weekly Market Pulse: Fear Makes A Comeback

Fear tends to manifest itself much more quickly than greed, so volatile markets tend to be on the downside. In up markets, volatility tends to gradually decline.

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Weekly Market Pulse: A Very Contrarian View

What is the consensus about the economy today? Will 2022 growth be better or worse than 2021? Actually, that probably isn’t the right question because the economy slowed significantly in the second half of 2021. The real question is whether growth will improve from that reduced pace.

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Weekly Market Pulse: Has Inflation Peaked?

The headlines last Friday were ominous: Inflation Hits Highest Level in Nearly 40 Years. Inflation is Painfully High… Groceries and Christmas Presents Are Going To Cost More. Inflation is Soaring..

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Weekly Market Pulse: Discounting The Future

The economic news recently has been better than expected and in most cases just pretty darn good. That isn’t true on a global basis as Europe continues to experience a pretty sluggish recovery from COVID. And China is busy shooting itself in the foot as Xi pursues the re-Maoing of Chinese society, damn the economic costs.

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Weekly Market Pulse (VIDEO)

Alhambra CEO talks about last week’s reversal in bonds yields, if there’s a growth scare, what the yield curve is saying, plus reports on wages & salaries, core capital goods, and jobless claims.

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Weekly Market Pulse: Growth Scare?

A couple of weeks ago the 10 year Treasury note yield rose 16 basis points in the course of 5 trading days. That move was driven by near term inflation fears as I discussed last week. Long term inflation expectations were and are well behaved.

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