Wall Street starts with the conclusion that we are in the "last mile" of the battle against inflation and the economy is "normalizing" to its pre-pandemic rules. They are missing the signs that year-over-year headline CPI may not get below 3% in the next several months and the hopes of many rate cuts could be dashed.
Today's topics include Jim discusses active versus passive management, more on yesterday's CPI release, payrolls & CPI take wind out of bonds' sails, rate cut hopes disappearing fast, who is exposed to commercial real estate?, government finances, globalization, and is Nvidia the Cisco of the current tech run?
Inflation came in slightly above expectations in January. Supercore inflation, a measure closely watched by the Fed, rose for a third straight month. A May rate cut is now in doubt.
Today's topics include all in on tech rally, calls for recession are fading, stock bond divergence, more on commerical real estate struggles, watching liquidity in Europe, who knew saving harms wealth?, new hedge fund rules deem them "systemically important", and Bitcoin tops $50k again
High yields provide the primary competition to expected returns for stocks. Even though rate cut expectations are being removed from market pricing, yields have held their recent range. Stocks will keep going up until this range is broken.
We are over halfway through the Q4 2023 earnings season. Earnings expectations were declining into reporting season but given strong beats, quarterly growth expectations have risen.
Today's topics include previewing tomorrow's CPI report, the Fed remains patient on rate cuts, in search of neutral, businesses see Fed as too restrictive, stock valuations, housing's supply problem, commercial real estate, and AI & productivity
New one from @psarofagis that says it all pic.twitter.com/JR4IAS8XPj — Eric Balchunas (@EricBalchunas) February 7, 2024
Today's topics include banks kick rate cuts further down the road, canary in the coal mine?, David Zervos focuses on the Fed put rather than rate cuts, nothing to see in CPI's annual revisions, active vs. passive, dividend investing, equity fund outflows, NYCB & the banking industry, and China's stock market