Promoting Useful Knowledge

  This week is going to be a short post with hardly any commentary from me. I still wanted to share some of the goods from the week. Bond holders are currently feeling the pain most. Jerome Powell had second thoughts on just how aggressive the Fed was going to be. Now, he says they're done just acting tough, but ready to fight, inflation that is. Since I haven't been able to dive into this, I thought I'd share some commentary from one of my colleagues, David French . As the Federal Reserve is ready to embark on an expected aggressive series of tightening moves, how does the rates market generally respond? I went back to 2017 and 2018 when the Fed tightened 3 and 5 times (total of 8) over 2 years. How did rates respond? Looking below, the 2y-10y spread (Purple line) reversed its steepening and began a long flattening trend that continued all the way through the rate hikes and stopping when the last one was done. This provides a view that the yield curve is very responsive i...

As I watched some 40 hours plus of sports starting Thursday through the weekend, I had the title in my head, but couldn’t think of how to open the post. Then we had a typical March college basketball tournament. For those outside the US, every March university’s battle in a 68 team tournament for the national collegiate title. It happens for both the men and the women, but the men’s tournament always seems to be a little more chaotic. The tournament extends over three weekends. There are small schools that drive deep in the tournament with no real business doing so (aka Cinderella), there are mid-sized schools that make some noise and punch above their weight, there are the big schools many expect to be there and then there are the blue bloods. The blue bloods are those teams that dominate history and own almost all the records. One or two almost always find themselves playing into the third weekend. Looking back at 2021, here’s how things played out. The blue bloods of assets are larg...

You might think this week's title has to with the children's television network, but Nickelodeon was the name of the first movie theater in Pittsburgh, PA. It's fitting because last week had all the makings of feature films. The villain is evident. There's the questionable behavior by the supposed guy that's supposed to keep us safe. There's the person who doesn't care what's going on, they're just trying to make money.  Where to start was a challenge. Markets are still oscillating around news out of Europe. Well, maybe that’s not true. The definition of oscillate is to swing back and forth at a regular speed. There’s nothing regular about the way many markets performed last week. Wheat had a wide swing again, but that was nothing compared to the story in Nickel, though Nickel was just straight up before being halted. The LME actually canceled some trades that were done north of $100k. Keep in mind this metal was trading at just $20k at the beginning...

  Sit back and grab a bottle of wine, or if you’re reading this at the office a very large cup of coffee. This week I really pulled a few threads and found myself learning a ton. Things are still mostly about Russia and inflation. I want to highlight again, in case this is your first time finding this, I abhor the situation in the Ukraine and I wish there's is more that I could do to help, but my focus here is to explain how it's impacting financial markets. As the title suggests, we're all waiting on the world to change, for war to end.  As I’ll show below, commodities across the board are just ripping, especially those with ties to Russia. Equities were off a bit because of all this, but not as much as one might expect. The West is attempting to slow down Putin’s push in Ukraine by tightening sanctions on him, his cronies, and Russia. Anyone and everyone is scattering away from ties with Russia like a child with cooties. BP pulled out of a deal with Rosneft. Equinor, Shel...