0DTE options have become a focus for market participants trying to understand where risk lies. Looking at the derivatives market and how these options are traded is a crucial first step. ... Read More
Powell just finished, and here is the updated probability that the Fed will hike 50 next week. Go with the market probabilities, and you’ll be mistaken for Nostradamus. So much for the idea that nothing happens at these testimonies! The... Read More
Redfin's alternative measures of the housing market continue to show a slowdown in the crazy conditions of the last year.... Read More
10-year Japanese government bond yields are pushing against their 0.50% yield curve control ceiling again. Despite a 30-year high in inflation and rising wages, the Bank of Japan remains in a decades-long fight against deflation. Something has to give, the inflation data or yield curve control.... Read More
Australia ended its yield curve control in 2021. The unwind serves as a warning for Japan and anyone else that wants to consider fighting economic or market forces.... Read More
Between the strong payroll report on February 2, the higher-than-expected inflation report on February 14, and the recent rise in used car prices, markets have repriced their expectations for Fed hikes significantly over the last two weeks. They now expected the Fed to hike above 5.25%, maybe as high as 6% by fall.... Read More
So, the inflation rate gets to the high 2% or low 3% range by the release of the June report in July, then the base effect turns positive and inflation drifts up the rest of the year. To repeat, Powell could not be more clear, he is not raising the target rate above 2%. So the Fed keeps hiking beyond 5.25% to get to "sufficiently restrictive."... Read More
Jim interviewed "Rethinking Real Estate" author Dror Poleg for the Real Vision platform. Dror explains how technology is reshaping the real estate industry and predicts the reshuffle of work, cities, and homes brought on by the Covid-19 pandemic.... Read More
As market participants embrace what may or may not be a new bull market, retail traders and institutions alike are piling back into the options markets, driving volume to historical levels. ... Read More
Economists still use their pre-Covid models and understanding of the economy/labor market. This is leading to confusion and errant forecasts. It's time to start thinking about new models and understanding for the "post-Covid" economy.... Read More
The UK futures derivative exchange ION was hit by a ransomware attack shutting down its systems. ION is a significant enough exchange that the CFTC decided to delay the CoT report this week because too much data would be missing. ... Read More
The Fed sees more work to be done on the battle against inflation and is likely to push back on the easing of financial conditions. But how? They are almost done hiking.... Read More
For the last few decades we have been in a low interest rate environment where deficit spending would not cause major issues. However, a 40-year high in inflation prompted the Fed to tighten monetary policy at a fast pace. Higher rates mean the cost of servicing U.S. debt will follow higher. ... Read More
As part of the planned transition away from LIBOR, the CME will convert any remaining Eurodollar positions to SOFR positions on April 14. SOFR futures recently surpassed Eurodollar futures as the world's largest interest rate futures contract.... Read More
Flows follow performance, except for when they don't. Cathie Wood's investors seem willing to ride out market losses even as they have lost over 60% of their investment in just over a year. ... Read More
At one point in time Tesla was worth more than all other auto companies combined. Their fall over the past fourteen months puts them closer to Toyota's market cap.... Read More
Things have changed in China. We don't yet know exactly how. But to assume the country will immediately return to 2019 norms and its economy will rebound immediately may prove overly optimistic.... Read More
Everyone's consensus call is a mild recession in 2023, and market participants seem eager to accept the consensus call. Given this view, where do valuations stand?... Read More