Major Risk-Off Alert August 5, 2024 Reminiscent of October 19, 1987, a.k.a Black Monday when a difficult Friday session coalesced into a category 5 stampede out of risky assets culminating in a record 22.6% single day plunge in the DOW, today has seen a cascade of eye-popping equity market drops. And like then, an element…
Next Week’s Menu: August 3-9, 2024 August 2, 2024 Central Banks: Monetary policies will be reviewed next week in Mexico, Peru, Moldova, Australia and India. The Bank of Japan will publish a summary of the recent Board meeting and minutes from the previous one. Holiday and Special Events: There is a Civic Holiday in Canada…
U.S. Jobs Report Reinforces View that Fed Has Misread the Economy and Delayed Easing Too Long August 2, 2024 Unemployment in the United States rose from 4.1% in June to 4.3% last month, triggering the Sahm Rule that stipulates that if its 3-month moving average (4.1% in this case) happens to exceed the prior year’s…
Safety-Seeking Hot Money Flows Dominated Overnight Financial Markets August 2, 2024 The mood of investors around the world has suddenly become very guarded. The possibility of a broader Middle Eastern War has increased. An increasingly isolation-minded American public doesn’t seem properly prepared for that event, let alone the even more challenging risks associated with a…
Bank of England Rate Cut August 1, 2024 Although expected by many economists, the Bank of England’s 25-basis point Bank Rate decline to 5.0% embodied a surprisingly slim voting majority that included Governor Bailey. But four of the nine members of the monetary policy committee, including the chief economist Huw Pill, favored not yet reducing…
Continuing Post-FOMC Market Repercussions August 1, 2024 Chairman Powell’s press conference yesterday gave as much encouragement as one could expect to speculation that the Federal Reserve will begin a cycle of interest rate reductions at its next meeting in September. One of his major themes was the return of labor market conditions to those just…
July 2024 in Figures July 31, 2024 From a geopolitical standpoint, July was a tumultuous month. Britain got a new government, and the second round of French elections deprived the Far Right of the win that had seemed inevitable. U.S. Republican presidential candidate Trump barely escaped an assassination attempt, and President Biden gave up his…
FOMC Statement and Powell’s Press Conference July 31, 2024 Today’s FOMC statement modified the prior statement of June 12 in two notable ways. First, labor market conditions depict less tightness, with job gains that were previously seen as strong being depicted now as having moderated and with the jobless rate still low but having moved…
Bank of Japan Announces Several Policy Changes July 31, 2024 Just four months ago, the BOJ made a baby step toward normalizing its ultra-loose monetary policy, ending the negative 0.1% short-term interest rate that had prevailed since January 2016, lifting such to 0.0-0.1%. By a 7-2 margin with two dissents in favor of another baby…
Second Quarter Euroland GDP Growth and Some Central Bank Rate Announcements July 30, 2024 A 0.6% rebound of the dollar against the Japanese yen was the singular significant movement overnight in the U.S. currency. The 10-year Japanese JGB yield fell two basis points, moving through 1.0% to 0.99%. Comparable U.S. and British sovereign debt yields…