The Federal Reserve left interest rates unchanged in yesterday’s policy announcement, marking the first time the central bank has not lifted rates since the hiking cycle began in March 2022. But Fed Chairman Jerome Powell was careful to advise that more hikes may be coming.
Monthly Archives: June 2023
Macro Briefing: 15 June 2023
* Fed’s Powell sees progress on taming inflation, but says more hikes still possible
* US housing market is tight because most homeowners have low mortgage rates
* China industrial output grows less than expected in May
* China central bank cuts its key medium-term lending rate
* EU suggests breaking up Google’s ad business in preliminary antitrust ruling
* US wholesale inflation fell more than expected in May
* Fed leaves interest rates unchanged but expects more hikes ahead:
10-Year US Treasury Yield ‘Fair Value’ Estimate: 14 June 2023
The market continues to price the US 10-year Treasury yield at a relatively wide spread over its “fair value”, based on the average estimate of three models assembled by CapitalSpectator.com for May 2023.
Macro Briefing: 14 June 2023
* Federal Reserve expected to skip rate hike in today’s policy announcement
* Rising stock market implies monetary policy isn’t tight enough to tame inflation
* US economy may be “slipping into an expansion”, says fund manager Tom Lee
* Decoupling from China would be “disastrous”, says Treasury Sec. Yellen
* Global oil demand to peak around 2028 as energy transition unfolds, IEA says
* Eurozone industrial output rebounds in April but outlook remains cautious
* UK economy bounced back in April, expanding 0.2%
* Small business sentiment ticks up in May, but remains near multi-year low
* US consumer inflation eases to 4% annual pace in May–lowest in over 2 years:
Bear Market Persists For Commercial Real Estate Stocks
Investors are celebrating what some say is a new bull market for the broad US equities market, but the party remains on ice for commercial property shares.
Macro Briefing: 13 June 2023
* China unexpectedly cuts key interest rate amid concerns of slowing growth
* US junk loan defaults rise sharply as higher interest rates take a toll
* Japan’s Nikkei 225 stock index rises to highest level since 1990
* A sharp downturn in commercial real estate would threaten big banks
* US regulators seek to block Microsoft’s Activision takeover
* Consumer inflation expectations for year-ahead outlook ease in May: NY Fed
Risk Assets Rallied Last Week As US Bonds Eased
Buyers pushed up prices for most of the major asset classes last week. US bonds were the downside outliers, based on a set of ETFs through Friday’s close (June 9).
Macro Briefing: 12 June 2023
* Inflation forecasts show pricing pressure easing slowly in May
* Bond investors disagree with Goldman Sachs’ low-recession forecast for US
* Despite recession warnings in key indicators, US stocks keep rising
* China faces economic headwinds as paying down debt picks up speed
* Manufacturers around the world are struggling with lower demand for products
* US House of Representatives paralyzed from conservative revolt
* Silicon Valley considers if technology has reached the point of singularity
* US stock market closed at 10-month high on Friday:
Book Bits: 10 June 2023
Scott Patterson
Review via The New York Times
The world Patterson portrays is largely divided among two camps: investors who subscribe to Taleb’s “Black Swan” philosophy of financial markets as vulnerable to unforeseeable shocks and those more convinced by the French researcher Didier Sornette’s “Dragon Kings,” anomalous but somewhat foreseeable events. Sornette, who steadfastly believes in “pockets of predictability,” finds Taleb and his partner Mark Spitznagel’s credo a touch too woo-woo. “Quants,” the financial engineers who trust complex formulas to tell them what the future holds — and who are the focus of another book by Patterson — are the extreme foil to both groups.
“The Black Swan concept is dangerous,” Sornette tells Patterson. “It puts us back at the time of pre-science where the wrath of nature, the lightning, the storms were the expression of the anger of the gods.”
Is It A New Bull Market Yet?
The US stock market closed on Thursday (June 8) with a 20% gain above its previous low in October, triggering announcements by a number of analysts that a new bull market has started. Let’s dig into the details and commentary for some perspective.