Ain’t That a Kick in the Head
VIPs 10-Year Treasury yields slipped to an intraday low of 1.15% yesterday, 20 bps south of the lowest Q3 yield forecast by Bloomberg; even smaller was the 2s/10s spread hitting a low of 98 bps before ending the day at 100 bps, pushed down by the delta variant and...
Old Long Since
VIPs Despite Q2 GDP boasting some of the strongest consumer spending since the 1950s, first half fiscal transfers totaled an annualized $14 trillion, or 62% of U.S. GDP; as of June 2020, real personal income, net of government transfers, is actually down by $50.5...
The Dean of Hamburger University
VIPs On July 15, the Treasury Department sent out $15 billion in child tax credit payments, averaging $423 per household; per Bank of America customer data, households that received the injection saw spending spike, whereas households that didn’t continued to...
The Remarkable Story of Chicken Big
VIPs At $178 billion in Q1, S&P 500 buybacks are off their COVID low of $89 billion, but still down from Q1 2020’s $199 billion; meanwhile, operating earnings less buybacks and dividends hit a record $99 billion in Q1, just above the old record of $97 billion in...
The Rising
VIPs The Labor Curve, the spread between Jobs Hard to Get and Fewer Jobs from Conference Board’s consumer survey, is inverted and flashing a late-cycle signal; past inversions beyond -3 were all followed by a recession, making July’s -6.3 reading all the more...
Wax on, Wax Off
VIPs Yields on 10-year TIPS fell to a record low of -1.11% yesterday, with the difference between real and nominal yields hitting 2.4%, the highest since June 4; the fresh move lower in real yields is likely due to private investors, as the three largest TIPS ETFs all...
Bucking the Moon
VIPs Friday’s IHS Markit manufacturing headline moved up one point to 63.1, but Input Prices continue to rise to ever record highs; higher input costs have begun to wear on executive outlooks, as Future Output and New Orders both appear to be coming off recent highs...
Keith Goldberg Asks, “What’s in Your Wallet?”
VIPs The week ended July 17 saw a third straight jump in not seasonally adjusted initial claims, returning above 400,000 for the first time since June 5; despite falling off of pandemic highs, US claims are still 87.5% above the pre-pandemic levels from the week of...
In QE We Trust
VIPs Since July 2008, the Fed has grown its holdings of Treasuries and MBS from $479 billion to $5.223 trillion; meanwhile, market instability fomented, with 2017 seeing 52 days where the VIX closed below 10 vs. just 9 days total prior to then, across 1993-1994 and...
Giant Sucking Sound
VIPs The U.S. trade deficit has grown nearly 50-fold to $1.1 trillion from $23 billion in Q1 1981; America’s busiest port by tonnage, Houston, saw traffic rise 66% YoY in May, and if the import surge persists into 2022, GDP math indicates it will temper top-line...