Political Capital Not Well Spent 03-22-17

Yesterday, the S&P 500 logged its first daily loss of 1 percent or more in 2017. In fact, it’s the first such loss for the blue chip index in five months. In the post-election euphoria, the market has priced in faster growth as most market participants seem to assume that President Trump’s legislative agenda will have a smooth passage through Congress. This week’s drama over the Affordable Care Act (aka Obamacare) appeal shows that in fact that isn’t the case.    Read more about Political Capital Not Well Spent 03-22-17

A Dovish Rate Hike 03-15-17

As was widely expected, at the end of its two-day Federal Open Market Committee meeting, the Fed today raised the benchmark federal funds rate. With one dissenter, committee members voted to increase the rate by one-quarter percentage point to a target range of 0.75 percent to 1 percent. This was no surprise given recent economic data and recent Fed official comments that strongly telegraphed the imminence of a hike. Read more about A Dovish Rate Hike 03-15-17

Market Showing Some Weakness 03-08-17

The big mover today was oil, which ended trading at a 2017 low. The weekly U.S. oil inventory published by the Department of Energy showed an 8.2 million increase in the week ended March 3. The total crude stock tallied 528.4 million barrels, a record. Since reaching a low of 468.2 million barrels in October, the inventory has risen by nearly 13 percent in about two-and-a-half months. As oil prices have recovered into the $50 range, U.S. oil production has risen to a one-year high.   Read more about Market Showing Some Weakness 03-08-17

Trump Effect Continues, For Now 03-01-17

Last night, President Trump delivered his first speech before Congress, effectively a State of the Union address. He adopted a more statesman-like demeanor and spoke of themes of unity and making America great again. He pledged massive tax cuts, health-care reform, higher defense spending and $1 trillion in infrastructure investment. He also endorsed NATO—contrary to remarks he had made earlier—which calmed some nerves. The tone of the speech was also more uplifting than his Inaugural Address. Read more about Trump Effect Continues, For Now 03-01-17

Gearing Towards Another Move 02-22-17

Today the Fed released the minutes from its last Federal Open Market Committee (FOMC) meeting held on January 31 and February 1. The details of the meeting show that the committee members leaned toward raising interest rates again “fairly soon” if upcoming jobs and inflation data are in tune with or better than expectations. Read more about Gearing Towards Another Move 02-22-17

Elections, Central Banks and Currencies 02-15-17

Germany’s Sunday legislative election of Social Democrat and former foreign minister Frank-Walter Steinmeier should not change the market horizon much. The left-of-center German president-elect, won 931 of the available 1,239 votes from the Bundestag lower house and representatives of its 16 federal states chiefly owing to the inability of the more conservative Christian Democrats to agree on a candidate of their own. Read more about Elections, Central Banks and Currencies 02-15-17

Perpetual Call Option 02-08-17

President Trump’s executive orders so far, while politically controversial, don’t have a significant near-term economic impact. However, one political event we are monitoring closely across the Atlantic is the upcoming European elections. Read more about Perpetual Call Option 02-08-17