close button

Where do you
want Profentia?

  • On Your iPhone & iPad:
    Profentia for iPhone & iPad
  • In Your Email:
  • In Your Feed:
    Profentia RSS RSS

Profentia: January 19th, 2015

Today’s data: Weekly Jobless claims drop a bit, good news.

Our markets this morning are churning again as volatility is the order of the day and there is true confusion within the herd. The followers are unsure who, what or when to follow. The next leader could be a trend, a shift in expectations or a policy move of some sort. Yesterday, in case you were otherwise occupied, was trolling along just fine (the fish were not biting) and then the release of the January FOMC meetings were released — kaboom! The
Street had a pretty good sense prior to the release, going back to the post-meeting communiqué, that the Fed was getting all riled up and ready to start raising rates (normalizing them in the jargon). Bonds had been getting hammered after a huge rally in January and the usual cast of characters was busy explaining how horrific a year this will be for bonds — just as they did in 2014 and were all proven categorically incorrect. Well, reset time after the release and it is carrying on into today.

The Big Picture: Our economy is slowing down, the reasons why are growing.

You and I are going to hear a lot more about this in the next couple of months methinks as the ‘headwinds’ pushing against the forward momentum of our economy grow stronger and the momentum grows weaker. Without question the Fed’s “blinked” in the meetings in late January and that was clearly captured in the minutes as we saw yesterday. Since those meetings ended, virtually all of the data has surprised us all with its lack of achievement; very modest expectations were set for all of the data sets and all of them failed to even make the understated goals. In spite of this the market tone has been all about a Fed ready to rush in, June being the likely first step and bonds as we mentioned have been getting hammered. If you have a chance read the minutes; two things will become apparent. One, the writer is new and writes with a clarity that the previous writer avoided diligently; they are now real rather than clearly filtered with a bias. Second, the amount of time spent discussing the inflation mandate was far greater than the jobs discussion and the tone of the inflation conversations portrays an unease that is palpable. The minutes completely dash any chances of a June move, they dash any chances of a later in 201054 move as well – as we have been opining since 2013 I might add. Now, finally, they truly are questioning whether this 33 month failure to achieve their 2.00% lower bound is in fact transitory. Finally as they come to see that headline and core readings will move significantly lower in 2015 and with that any chance that they will normalize rates is gone.

Investment Portfolio: So we have the stunning minutes and this morning Germany says nein.

The Greek’s presented their letter of suggestions to re-craft their debt repayments to the bail-out funders, Germany being the largest and most influential, and the response was an immediate (and expected) go fish. This was expected (not unexpected, as the confused are saying today); Greece is so caught up in its own madness at the moment that it is unable to tell the difference between wants and needs and it thinks its wants are more important than the needs of the hand that feeds them. Something will soon give in here; the petulant child enamored of its own self-importance will soon understand that it will not get its way. It really is that simple.

Weekly Market Data

  • Thursday
    02/19
    Open:Close:
  • Wednesday
    02/18
    Open:Close:
  • Tuesday
    02/17
    Open:Close:
  • Friday
    02/13
    Open:Close:
  • Thursday
    02/12
    Open:Close:

Current Market Levels from Bloomberg daily

  • Monday: 2/16
    No data
  • Tuesday: 2/17
    No data
  • Wednesday: 2/18
    Jan. Housing Starts expected at 1.070mm >>1.065mm
    Jan. Building Permits expected at 1.069mm >>1.053mm
    Jan. PPI expected at -0.4% >>-0.8%
    Jan. Cap U expected at 79.9% >>79.4%
  • Thursday: 2/19
    Weekly claims expected at 288k >>283k
  • Friday: 2/20
    No data

Data is taken from sources considered to be accurate, most often that of an agent of the US Government; no guarantee of accuracy is suggested.

Past performance is not a guarantee or a reliable indicator of possible future results. Investing in the bond markets is subject to certain risks including credit (worthiness of the issuer), market (interest rate changes), inflation uncertainties over time and the possibility that investments may be worth more or less than the purchase cost when they are redeemed. U.S. Treasury Bills, Notes and Bonds are backed by the full faith and credit of the Government, certain U.S Agencies are also backed in a similar manner and certain other Agency Issuers are backed solely by the Issuing Agency itself. Portfolios that invest in those securities are not guaranteed and they will fluctuate in value with time. High-yield low rated securities involve greater risks than higher-rated securities and portfolios that invest in lower-rated issues will incur more risks than portfolios of higher-rated only securities.

This article contains the current opinions of the author, but not necessarily that of Alfstad Capital, LLC, and a branch office of Commonwealth Financial Network. The opinions of the author are subject to change without notice. This article is distributed for informational purposes only. Here-in contained forecasts, opinions and estimates are based upon proprietary research or from publicly published sources and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.

Information contained here-in has been obtained from sources believed to be reliable, but not guaranteed. No part of this article may be reproduced in any form or referred to in any other publication without written express permission of Alfstad Capital, LLC and Commonwealth Financial Network.

Comments are closed.