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Tom Essaye Quoted in Yahoo Finance on February 20, 2020

The second reason stocks could keep rising is that so far, the economic fallout from the COVID-19 virus appears to be only temporary. In fact, Essaye said investors are seemingly…

Watch How SHY Trades After the Jobs Report

I want to again point out that, although I’ve heard the opposite lately, both stocks and interest rates can rise together going forward.  As I pointed out about two weeks ago, the key difference between this recent rise in yields and the May-August rise in yields is that this time, the “short end” of the yield curve hasn’t sold off (it has actually risen).  And, that implies the market is more comfortable with the idea of higher interest rates, and that this recent rise in rates, and subsequent steepening of the yield curve, isn’t a “rally killer” for stocks.  Read More

Jobs Report Preview

The “consensus” expectation is for 185K jobs added in November, although given yesterday’s ADP report, the “whisper number” is somewhere closer to 200K. I’m going to give the “Goldilocks” scenarios, but first keep these couple things in mind …

Why IOER Matters to You

IOER, or “Interest On Excess Reserves,” refers to the interest the Fed and other central banks pay banks on their excess money (reserves) they keep in those central banks. So, if I’m a large bank, and I deposit more money than is required at any Fed bank, I get paid 25 basis points on that money. As of the latest Fed release, in October there was more than $2 trillion in “excess reserves” on the Fed’s balance sheet, earning 0.25% annual interest.

The Economy: A Look Back and What’s Ahead (12.2.13)

Economic data was pretty light last week, even despite the holiday, but there were a few takeaways worth noting…

The Economy: A Look Back and What’s Ahead (11.25.13)

Last week was highlighted by lots of “Fed-speak” and important economic data, and the net effect of both was to firmly solidify expectations for a Q1 ‘14 tapering of QE, and to incrementally increase the chances for a January taper (as opposed to March). Despite last week’s good data and “hawkish” Fed-speak, a December taper is still remote (and it’ll take a blowout jobs report next week to move those odds up significantly).

Where Are You Going To Go?

I wanted to touch upon Mr. Fink’s comments about the pension fund re-balancing.  With the S&P 500 up 25% year-to-date, funds rebalancing their equity exposure to get back in line with their respective allocations makes sense. But my question is, where are they going to go with the cash?  Bonds? If I’m a PM at […]