Aggressive Rate-Hike Expectations Subject To Change Should Inflation Show Signs Of Stability

The Fed is using both conventional and unconventional tools to deal with surging inflation. This is bound to impact economic activity, which is already showing signs of deceleration. Inflation could be the next shoe to drop. Any signs of this … Continued

Corporate Bond Issuance Continues To Soften, Can Potentially Impact Buybacks In Coming Quarters

posted in: Credit, Economy | 0

Corporate bond issuance is on pace to decline 14.3 percent this year. This comes at a time when corporations have been aggressively buying back shares. With six months in, US corporate bond issuance remains soft. In June, corporations issued $73.2 … Continued

Managements Have Opportunity To Use 2Q Earnings Season As Kitchen-Sink Quarter

posted in: Economy, Equities, Technicals | 0

Next week, the 2Q earnings season begins in earnest. Equities took a big hit in the first half. The sell-side is yet to bring out scissors as relates to 2022/2023 earnings estimates. It will be even more disappointing if corporate … Continued

Major Equity Indices At/Near New Highs Ahead Of 2Q Earnings; Revision Trend +VE Throughout Quarter

posted in: Economy, Equities | 0

The 2Q earnings season begins in earnest next week. Ahead of this, major equity indices are at or near their highs. The revision trend was positive throughout the quarter. Investors heavily bought into this. Their post-earnings reaction will be telling. … Continued

Amid Heightened Inflation Worry, 10-Year T-Yield Vulnerable To Downside Surprise

posted in: Credit, Economy, Technicals | 0

As talk around inflation has gone up several notches, the 10-year treasury yield sits on triple support. A breach has room to squeeze TLT shorts. Inflation is front and center. It is perky. As recently as February this year, core … Continued

Unlike Its Large-Cap Peers, Russell 2000 Last Week Both Opened And Closed Strong – For Clearer Message, 1600+ Needs To Give Way

posted in: Economy, Equities, Technicals | 0

Last week, the S&P 500 as well as the Nasdaq 100 started out strong but finished poorly. The Russell 2000, on the other hand, stayed strong, closing near the week’s high. Before one interprets this as markets’ way of telling … Continued

Fed Takes Sharper-Than-Expected Dovish Turn, Stocks Yawn

The Fed Wednesday held interest rates steady.  No surprise there.  But the bank was even more dovish than markets expected.  That was a surprise.  Even more surprising is how stocks reacted. The Fed Wednesday left the fed funds rate unchanged … Continued

Fed Likely To Again Use Balance Sheet As Tool, Stocks May React Differently

The Fed meets this week.  It already shifted its bias from hawkish to dovish, helping stocks.  With the economy softening, in due course the Fed may once again deploy balance sheet as a tool, which will initially help stocks, but … Continued

10-Year T-Yield At Crucial Support – Breakdown Opens Door For 2%

posted in: Credit, Derivatives, Economy, Technicals | 0

Bonds and stocks diverged for a couple of months before beginning to move hand in hand this month.  The former is not buying the enthusiasm shown by the latter.  The 10-year T-yield currently sits at decade-old support.  A breakdown will … Continued

Retail Sales Data Gives More Ammo To Those Fearing Recession

posted in: Credit, Economy | 0

Thursday’s retail sales data likely poured more gasoline into the recession-fear fire.  The cycle is getting long in the tooth.  Risks are rising.  The expansion has lasted for nearly a decade.  Contraction is just a matter of when not if. … Continued