Does First-Look GDP Mean a Rate Hike?

Yesterday’s first-look GDP for the second quarter was on balance a decent number, as positive revisions to Q1 and good details imply steady, if unspectacular, growth. The headline first-look GDP headline missed, but that was countered by significant positive revisions to Q1 GDP, which went from –0.2% to +0.6%. That’s an important shift, and definitely[…]

My Hawkish FOMC Takeaway

The FOMC meeting largely met expectations, and did not cause any material ripples in stocks. There was no change to interest rates and the FOMC did not forcefully hint towards a hike in September. But what’s the real FOMC takeaway? Despite that lack of clarity, we still believe that unless economic data turns materially worse,[…]

Fed Meeting Preview

The Fed meeting is tomorrow, so that means it’s time for a Fed meeting preview. While no rate hike is expected tomorrow, the main question on everyone’s mind tomorrow when the FOMC releases its statement at 2:30 p.m. EDT is: “September, or not?” The consensus is that the Fed will not telegraph that a rate[…]

Not a Bearish Game Changer

Stocks dropped sharply last week, thanks partly to positioning (the S&P 500 sprinted from 2,044 to 2,132 in less than two weeks and some digestion was needed), but there were also legitimate fundamental reasons: disappointing earnings, and the implosion (again) of the commodity space. And, given the surprising weakness in the SPX last week, it’s[…]

Why are Bonds Rallying?

Bonds rallied yesterday, as the long bond rose approximately 1.3% yesterday to trade basically to the July highs, and that has officially caught our attention. Bonds have rallied this week (and most of last week) despite resolution in Greece, generally “fine” economic data (Existing Home Sales and Jobless claims were actually good), despite some “hawkish”[…]

Are Commodities Warning About Deflation?

In Markets 101 we’re taught that when industrial commodities (base metals, oil, coal, etc.) plummet, it is usually a harbinger of deflation. Commodities in aggregate have absolutely plummeted, all the way back to panic lows of early 2009. Additionally, the recent bond rally quasi-confirms the whiff of deflation. So, the question we are obviously asking[…]