Promoting Useful Knowledge

  It seems all the Hawks came out on Wednesday. First, the hawkish comments out of Chairman Powell’s speech then it was the NBA’s Hawks that stunned the Sixers that night with a 26 point comeback on their way to a series win. The Fed said it was beginning to think about raising rates as inflation might be a bigger problem than initially expected, almost no asset was spared. Equities sold off a bit, some sectors worse than others. As mentioned, the bond market reacted with the Fed. The front end sold off and the ultra caught quite a bit, so as we’ll see in the IFR piece we have a quick flattening of the curve. Five year break-evens also fell on the day. That implies that the Fed's measures are likely to curtail inflation. Commodities were hammered across the board, but Metals really got beat up. The only true beneficiary on the day was the US Dollar. It rose 1.84%, which is a gigantic move for the global reserve currency. Speaking of currency, Crypto was not immune to this either. B...

Inflation is here. Isn’t it? I mean the YoY CPI print was +5% and the MoM was +0.6% for the US. The bulls seem to be promoting the transitory mantra and it seems most of the market is buying what they’re selling. If inflation is really here, I know just the guy we can turn to to help with deflating things. In other news last week, the JOLT job openings in the US hit their  highest level on record  in April (9.3 million), while layoffs hit a record low. The accommodation and food services industry is really hurting for workers, adding like 350k new unfilled jobs. Things are all out of sorts.  The G7 is looking at a global tax deal to put a floor on tax rates. We’ll see about that. At least they could all get together for some really goofy greetings. I'm also starting to think anything is possible after seeing the Senate pass a bipartisan bill on tech and manufacturing. There are two big events already on the calendar this week. The first is the June FOMC meeting and ...

  Wow! That was quite the fun week for only four days. Did you think anything else would be the focus of this week’s post? Well, if you thought about this blog at all, I’d be surprised. I mean you can’t make some of this stuff up. The CEO even showed up pantsless to a Zoom meeting with a retail YouTuber. But how can you pass this stock up? There’s free popcorn dividends. I thought Andrew Ross Sorkin had a good post about this. He said that it’s not about these companies or their stocks, but more about the fact that the "public views the stock market (and economy) as something that is manipulated and not trusted." My friends were texting me again arguing that the man was trying to keep them down by halting the stock. It’s impossible to find a way to explain this to people that don’t want to understand. There’s more on AMC below. along with a lot on equities content with a bunch of charts & screenshots. The US jobs report was one of the most anticipated economic reports in ...