First, the news on the coronavirus continues to be buffeted by media outlets’ urge to be the first to report. The need for speed creates a rash of questionable stories that later get retracted or certainly get less sensational when context is added. When trading around this, I urge caution as opportunity knocks for those traders who can remain patient. There seems to be scientific interest in the failure of the VIRUS to have impacted children. While it is in the early stages of a potential pandemic, according to my source on all things infectious diseases, it is an outcome to watch in an effort to measure the potential impact.
Archive for the ‘Mexican CB’ Category
Notes From Underground: Do You Hear What I Hear?
February 16, 2020Notes From Underground: Forward Guidance Takes a Step Backward
October 22, 2013Today the markets received the long-awaited data on the U.S. job situation and the major beneficiary seemed to be the HFT algorithms that had the number two seconds early. The stock indices, currencies and precious metals all reversed early movements and rallied just prior to the public release. Setting aside the trading action, the data continues to reflect a very tepid recovery. Nonfarm payrolls grew by 148,000 making the FED’s September 18 decision look credible. More important, the average hourly earnings grew less than expected and kept the pace of wage growth very anemic. The FED has communicated that it is the jobs rate that the markets should be mindful of when anticipating any future action to raise rates. The FED has told the markets that an UNEMPLOYMENT LEVEL of 7.0% or maybe 6.5% will be a threshold target that could prompt the FED into action.
Notes From Underground: Macroprudential Regulation Versus Tapering
September 10, 2013Notes From Underground: The Fed’s Zero Rate, Quantitative Easing Policies Are Stock Market Fundamentals
March 10, 2013The continued parade of stock market analysts who proclaim the equity market is rallying merely on Fed monetary policy instead of market fundamentals have spent far too much time doing case studies and not reading economic history. Interest rates as the variable signaling the cost of money are a very critical element and a key fundamental of the economy and especially the equity markets. U.S. multinational corporations are sitting on record piles of cash and also reporting strong profits. Much of the growth in profits can be attributed to two factors: Very low borrowing costs and continued pressure on wages. The FED has created the low interest rates and has hoped that the profitability resulting from low borrowing costs would bleed into higher wages and thus the need for increased hiring. The problem is many fold on the lack of success in aiding jobs creation. Globalization has kept pressure off wages and the deleveraging of the private balance sheets has meant that downward pressure remains on demand.