After beginning the year on a strong note equity and bond prices fell during February as strong economic data quashed hopes of a rapid Fed pivot. Ten-year U.S. Treasury yields leapt 42 basis points to 3.92% in February following a strong January payroll report of 517,000 additions, far above the highest economist estimate. The February Market Commentary will help explain what is going on.
Equities began the year strongly, moving up 6% in January as investors anticipated a more accommodative Fed and traders bought the most beaten down names of 2022. Part of the move was seasonal, as investors put new money to work after extensive tax loss sales of 2022. The January Market Commentary will help explain what is going on.
Markets haven’t believed the Fed all year. At every FOMC meeting Chair Powell seemingly surprises investors with Fed hawkishness. The same scene keeps repeating itself. But those days are long over; investors are now struggling to catch up with the Fed’s hawkish stance at every meeting. The December Market Commentary will help explain what is going on.
The CPI report date 10- Year U.S. shows treasury yields fell an astounding 27 basis points as investors concluded that we’ve seen peak rates. In total, 10-Year U.S. treasury yields plunged a whopping 45 basis points to close out at 3.6% for the month. Meanwhile, equities jumped 5.4% for the month on the belief that lower rates would support higher valuations. The November Market Commentary will help explain what is going on.
After a brutal September, the S&P 500 bounced 8% during October. With the heightened fears of the Liz Truss UK debacle in September, news could not get any worse—and it didn’t. When market sentiment and fear reach extreme levels, a constant stream of bad news is required to push indexes down further. In the absence of further unwelcome news, markets bounced. The October Market Commentary will try to help explain what is going on.
Interest rates reached levels last seen in 2010 following U.K. prime minister Liz Truss’ surprise deficit-widening budget (and associated borrowing requirements) forced bond sales by U.K. Pensions in order to meet margin calls. U.S. Treasury rates, already moving higher in September, were pushed to even higher levels as panic set in at U.K. pensions in search of liquid assets to unload quickly. The September Market Commentary will try to help explain what is going on.
Groupthink is incredibly powerful. If enough people believe something, will it come true? In the case of equity markets, yes—but only temporarily. Equity investors are slowly learning that the Fed must fulfill its inflation mandate for the first time in a generation. The Fed no longer has your back (as long as inflation persists)as it was previously. The August Market Commentary will try to help explain what is going on.
The Fed remained hawkish during the July meeting, but traders were having none of it, despite continued multi-decade highs in inflation. Yields on the US Treasury 10 Year fell 36 basis points during July as investors begin to price in an economic slowdown. Recall that the 10 Year was nearly 3.5% a month and a half ago. Bond managers have switched from inflation fear to recession fear. The July Market Commentary will try to help explain what is going on.
Continued Fed Hawkishness Drives Equities Lower and Rates Higher. In the face of rising inflation, the Fed turned increasingly hawkish, which pushed 10 Year US Treasury rates up seventeen basis points to 3.02% in June. While this was much lower than the 3.48% achieved in mid-month, the fear of continuing higher rates was enough to push equities down 8.8% in June. The June Market Commentary will walk you through the ups and downs and try to help explain what is going on.
Are 2022 earnings turning negative? Equites rebounded to close out May unchanged, rebounding from down 5.6% intra-month. The May Market Commentary will walk you through the ups and downs and try to help explain what is going on.
