Tag: rates
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Markets Potpourri
A smattering of thoughts: layoffs, AI bubble, Trump policy, crypto, Fed repo actions, fraud. Structural changes to US economy -> labor for infrastructure Verizon is the latest in a swath of tech companies laying off corporate staff, announcing it’s cutting up to 20% of it’s workforce. In recent weeks, Target Corp. announced plans to eliminate 1,800 roles,…
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Room to run: AI and Markets
The advances in Artificial Intelligence (AI) are expected to significantly impact workforce and education, despite cultural adaptation lagging behind. Major companies are heavily investing in AI models, presenting immense opportunities for growth. Additionally, the financial landscape is shifting due to high interest rates, influencing equity market dynamics and pushing for more private credit.
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What’s the Point, Powell?
Thoughts of a Liberal Arts Graduate on the Fed, interest rates, inflation, demographics, and more The entire point of low interest rates was to shift consumers up the risk ladder. Lower potential returns in lower risk baskets purposefully pushed investors toward riskier options; pushed them to take more risk, for the same reward. The Fed…
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Quick Thoughts on Markets: May 24
Quick thoughts on where markets will be/are: Multiple expansion thru 2019; bull market to continue or trade sideways with lower earnings estimates, lower guidance. P/E forward and trailing, P/S, P/CapEx, all rising thru 2019 Small cap debt expansion as small business owners feel more wealthy when tax season comes around in 2019, combined with rising…
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Knee Jerk Vol & the Fed
The Fed is now shrinking its balance sheet; they are no longer buying new securities as they mature. Below is a bit of analysis on if the Fed’s recent activities in shrinking its balance sheet is the cause of the recent rise in volatility. Quick note: Data is at a weekly tenor, from Jan.…
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Bogus Tweet Risk
Most financial media is focused on “tweet risk” or “trade wars”. To me, these seem like water under the bridge. It’s in China’s interest politically to retaliate to trade sanctions, but not in their interest to crash US markets. They hold a massive amount of US Treasurys, if they stop buying US bonds, rates…
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Who’s got the power?
When interest rates go up, and they will, the 50% increase across the board will topple markets, namely bond markets. Today’s interest rates are unprecedented. The lowest possible bound for an interest rate USED to be 0%. In finance terms, we call it the ZLB or the zero lower bound. Today bond yields in Germany…
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