Flush Money Market Funds Typically Mean Rally

Todd Sullivan says the majority of investors are still expecting a recession in the U.S. He says the record high Retail Money Fund level is consistent with a recession. The current market is in the middle of economic growth, not a recession, he says. Shorting T-Bills pushes rates higher and out of sync with the current level of pessimism. Investors should focus on well-managed companies reporting upside surprises.

Will U.S. Economy Stabilize In Q2 2024 After 2 Quarterly Downshifts?

Weaker U.S. Job Numbers Boost Expectations Of A September Rate Cut

Weaker U.S. Job Numbers Boost Expectations Of A September Rate Cut. Non-farm payrolls rose 175k in April versus the 240k consensus. Job creation was weaker, unemployment higher and wage growth more subdued than expected in the April employment report. The unemployment rate moves up to 3.9% from 3.8% and the average work week dropped to 34.4 hours. The report has breathed new life into Federal Reserve interest rate cut calls.

Jobs: Household Report Is Way Below A Weak Headline Number

The BLS reported a gain of 175k jobs which was below expectations of about 200k. The Household Survey was high last month but came in way below the Headline number. The unemployment rate rose slightly to 3.9%. April saw a reversal where part-time jobs were replaced by full-time. The BLS report was released on the first Friday of every month.

The Jobs Report: A Soft Landing At Hand

Softer April Jobs Growth, Bulls And Doves Rejoice

April nonfarm payrolls increased by 175,000, below estimates, and pulled forward rate-cut expectations. Unemployment rate ticks up to 3.9% in April from 3.8% in March. Average hourly earnings came in softer than expected, signaling a decline in wage gains. Stocks futures jumped and yield plunged, but key data remains on tap.

April Jobs Report: Growth Cools Below 200K

Labor Department reports 175,000 jobs were added in April, well below expectations. Unemployment also ticked higher, while wage growth slowed further. Notable cooling occurred in both the healthcare and government sectors. The April jobs report is unlikely to change the Federal Reserve's current interest rate trajectory.

Fed Balance Sheet QT: -$1.60 Trillion From Peak To $7.36 Trillion, Lowest Since December 2020

Total assets on the Fed’s balance sheet fell by $77 billion in April, to $7.36 trillion, the lowest since December 2020. Since the end of pandemic QE in April 2022, the Fed has shed $1.60 trillion. The Fed has removed 38% of Treasury securities and 27% of MBS from the balance sheet.

Federal Reserve Watch: The Beat Continues

Federal Reserve is committed to returning inflation to its 2 percent objective. The Fed will continue to reduce the size of its securities portfolio but at a slower pace starting in June 2024. $34.6 billion in securities came off of the Fed's balance sheet this past week.

'Sell in May and go away': Does it apply in 2024?

'Sell in May and go away': Does it apply in 2024? The adage posits that stocks tend to underperform in the six months from May to October. The S&P 500 has had positive returns in 75% of summer periods. But bears have been pointing to the outsized market gains since late October.

Solar Stocks, Berkshire, And The Latest Costco Craze

Home Earnings Analysis Solar Stocks, Berkshire, And The Latest Costco Craze. First Solar Earnings and Shareholder Meeting on Tap. The solar industry is now among the most susceptible areas to higher borrowing costs. Costco's same-store sales figures come out this week.

Chart Of The Week: The Softening Labor Market

The latest JOLTS report showed the lowest levels of quits since early 2018 when Core PCE inflation was around 2%. The quit rate is a good measure of labor market tightness. The disinflationary trend that was dominant in 2023 is still very much intact.

Median Household Income In March 2024

Median household income increased in March 2024. Motio Research estimates the income earned by a typical American household increased by $906 (+1.2%) from its initial estimate of $77,265 for February 2024. The year-over-year growth rate of median household income has been essentially flat since September 2023.

The Fed Moves To Preserve Liquidity, But Investors Should Remain Cautious

The Federal Reserve announced a reduction in the quantitative tightening program, selling fewer US Treasuries and potentially leading to lower interest rates. Market reaction to the changes in quantitative tightening was muted. Investors should monitor metrics such as money supply, overnight reverse repo activity, and liquidity to ensure inflation does not reignite.

Fed Holds Rates Steady, Powell Doesn't See The 'Stag' Or The 'Flation'

Federal Reserve leaves rates unchanged as inflation progress stalls, pushing rate cuts expectations further out. Fed Chair Powell adopts a more dovish tone, mentioning stalled inflation progress. Powell dismissed the possibility of a rate hike and emphasized the strength of the economy. The QQQ is a buy.

10yr/Mortgage Ratio Implies Market Rise Coming

National 'Debt' Issue Needs More And More Attention

Kenneth Rogoff warns against "magical debt thinking" and calls for developed countries to rebuild fiscal buffers and ensure debt sustainability. Too much government debt can slow down economic growth and disproportionately harm low- and middle-income citizens. The U.S. Has $34.6 trillion in government debt.

The Stock Market Slips Ahead Of Fed's Policy Meeting As Investors Brace For Persistently High Rates

The SPDR S&P 500 (NYSE:SPY) was falling about 0.25% Wednesday ahead of the Federal Reserve's decision on interest rates. The central bank is widely expected to hold rates steady but investors will be looking for clues as to when the Fed may begin easing. The SPY is retracing about 4.6% from the all-time high.

U.S. Employment Costs Reacceleration Incentivises The Fed To Be More Hawkish

US labour costs accelerated in the first quarter, led by the government sector. Hikes to state minimum wage levels contributed to higher private sector labour costs. This is the Federal Reserve’s favoured measure on labour market inflation pressures. Slowing quits rate suggests easing wage pressures... Eventually.

Stocks Sink In April As Inflation Fears Rise

The S&P 500 fell significantly in April, giving back a chunk of the year's gains. Higher interest rates amid hotter-than-expected inflation and growth data weighed on stocks big and small. The only area to finish in the green was the defensive Utilities niche.