Today's topics include the beginning of the end for QT, updating rate cut expectations in the U.S. & Europe, rate cuts & earnings, the rising correlation between stock & bond returns, monitoring whales for market advantages, an eye on fiscal policy, putting some costs on shipping problems, the effects of demographics, where's the recession?, and vacant office buildings
Over the past couple decades stock and bond prices have moved in opposite directions, thus increasing diversification benefits and offsetting tail risk. A positive stock-bond correlation is often a bad scenario for investors. What drives this correlation and how will it impact returns in 2024?
With the Fed's Reverse Repo Facility balance continuing its linear decline, the recent liquidity pump is nearing its end. How will this impact bank reserves and the Fed's ongoing Quantitative Tightening (QT) campaign?
Today's topics include more on inflation, stocks for the long run, Sahm says don't sweat the debt, Red Sea attacks are affecting the supply chain, the Fed's Bank Term Funding Program, an eye on credit card utilization & delinquency rates, El-Erian on 2024 economy, and day one trading for spot Bitcoin ETFs
The Fed's cumulative losses since September 7, 2022 now total roughly $135 billion.
The flexible components of inflation have helped move CPI and core CPI lower in recent months, but the sticky components remain higher than the Fed would prefer.
The 34 days it takes to sell a house is still low when compared to the past decade, but it is markedly higher than the frenzy seen from mid-2021 to early-2022.
As of Q3 2023, almost 60% of homeowners with a mortgage had locked in a rate under 4%.
The S&P 500 rose 24% in 2023 but was up only 10% at the start of November. Retail options positioning did not experience its usual rise during the market rally.
We have often argued the biggest economic event of our lifetime was the shutdown and restart of the global economy in 2020. Tracking public transportation gives an insight into just how significant this economic shift has been.