MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Monday, May 20, 2013
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7:16 AM Stopping asset purchases at once would be too disruptive, says Dallas Fed chief Richard Fisher, appearing on CNBC. The hawk instead calls for the program to be tapered, beginning imminently. "We've made people richer ... the question is what have we done for working men and women in this country." 3 Comments
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Sunday, May 19, 2013
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10:12 PM The latest installment of the Senior Loan Officer Opinion Survey, has some observers worried. Citing "increased competition," banks generally reported easing their lending standards on business loans over the last three months, as razor thin margins have created a scramble for C&I business (previous). Concurrently, the amount of business loans extended rose 10% Y/Y to $1.55T, leading some to question whether the combination of more lending and lax underwriting standards might prove hazardous to the system. Competition "creates the temptation to do silly things," M&T vice-chairman Mike Pinto tells FT. 3 Comments
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Saturday, May 18, 2013
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3:34 PM Ben Bernanke may not have overtly mentioned monetary policy during prepared remarks for a commencement address at Bard College Saturday, but he did reference Yogi Berra, and in the process made a statement that those of a cynical persuasion might say could have been pulled not only from the quips of a baseball legend, but from any recent speech by hawkish regional Fed presidents (I, II, III): "It's tough to make predictions, especially about the future." Some would undoubtedly say the Chairman should consider this sage advice when making conjectures about the supposedly benign effects of policy tightening. 17 Comments
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Friday, May 17, 2013
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7:18 PM Shares of General Motors (GM +3.1%) eclipsed their $33 IPO price as investors speculate that the U.S. government may soon exit its ownership stake in the auto maker. The auto maker rose to $33.42 to close above its November 2010 IPO price for the first time since February 2011. U.S. taxpayers currently hold a 16.4% stake, or 241.7M shares worth about $8.08B. 4 Comments
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6:44 PM If we keep moving up like this, stocks could go "parabolic," says Art Cashin. The stocks that have the heaviest short positions have already raced ahead of the indices, and they are going to crumble if we keep going. (Video). 33 Comments
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2:59 PM Wells Fargo (WFC) and Citigroup (C) have halted the vast majority of foreclosure sales in numerous states following the release of new standards from the OCC, reports the American Banker. Harkening back to the days of the robo-signing scandal, Wells' foreclosure sales across 5 westerns states dropped to fewer than 10 per day in April from more than 300 previously. JPMorgan (JPM) also slowed sales, but has returned to normal activity. BofA (BAC) is proceeding as usual. 1 Comment
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2:33 PM The Fed hasn't lowered "real" interest rates enough, says Minneapolis Fed chief Kocherlakota, not disappointing his new fans. Somewhat hawkish until a near-religious conversion last year, Kocherlakota is now the most dovish on the FOMC (though not a voter this year) and fond of making statements like that. 14 Comments
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1:40 PM Surprise! America will continue to pay its bills. The White House informs Congress of the Treasury's intention to use "extraordinary measures" once the debt ceiling is hit this weekend. (previous) 7 Comments
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12:42 PM Now longer an outlier on the low side, BAML ups its Q2 GDP growth estimate to a roughly inline with consensus 1.8% from 1.3% previously. "The economy has shown a lot more resilience than we had thought, but the full impact of the fiscal shock has not yet arrived," writes Ethan Harris. He continues to believe inflation stays low, the Fed stays easy, and growth of 3% or better through 2014. Comment!
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10:35 AM Stocks add to gains (SPY +0.6%) as the mid-May UMich Consumer Sentiment read rises to 83.7 vs. 76.4 at the end of April and against expectations for 78. The current conditions index jumped 7.6 points to 97.5 - a new high for the economic recovery. Treasurys (TLT -0.7%) slide further. 3 Comments
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10:00 AM Apr. Leading Indicators: Leading Index +0.6% to 95.0 vs. +0.3% expected, -0.1% prior. Coincident Index +0.1% vs. -0.1% prior. Lagging Index +0.1% vs. +0.3% prior . 3 Comments
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6:35 AM A worldwide poll of investors, analysts, and traders conducted by Bloomberg shows more than two thirds believe the U.S. economic recovery is "sustainable," while only a little over a quarter of those surveyed see a return to recession within the next two years. Key drivers of the upbeat forecast include increasing energy independence, rising home values, and "a pause in partisan budgetary battles in Washington" (there's agreement in Washington?). Housing, it seems, is the main talking point: "Anyone who isn't long real estate housing is a moron," Axiom Management's Stan Jonas is quoted as saying. 3 Comments
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Thursday, May 16, 2013
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8:01 PM In what has been dubbed as largely a symbolic vote, the House of Representatives did what was expected and opted to repeal the health-care overhaul law, but it's is likely be dead in Congress’s lower chamber. The vote was 229 to 195 to repeal the measure, with two Democrats voting along with the Republican majority: Mike McIntyre of North Carolina and Jim Matheson of Utah. Sidenote: This is the 37th attempt to repeal the law since it was passed in March 2010. 19 Comments
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3:16 PM Knocking stocks for a few points is San Francisco Fed President Williams reiterating his hope QE can begin to be tapered this summer and halted by year's end. This is not the first time Williams has said such, but he does reside in the FOMC's dovish camp. He notes even without QE, Fed policy would remain extraordinarily stimulative. 19 Comments
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12:07 PM Bill Gross pokes some fun at himself, telling Bloomberg TV "We are not always right, but we are always certain." He reiterates his belief that the 30+ year secular bond bull market is over, but isn't expecting a 1994-like meltdown in Treasurys. He instead thinks Treasurys (TLT) and corporates - both investment-grade (LQD) and high-yield (HYG, JNK) - won't move much over the coming 12 months. 4 Comments
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10:16 AM Mortgage rates moved higher for the second straight week in Freddie Mac's survey, as the average 30-year fixed rate mortgage rose to 3.51% and the 15-year fixed rate climbed to 2.69% vs. 3.42% and 2.61% respectively in the prior week. A year ago, the respective rates were 3.79% and 3.04%. Comment!
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10:10 AM More on Philly Fed: The big miss is another in a line of weak data points this morning. The decline was led by a steep drop in shipments to -8.5 from +9.1. Also notable is a big jump in inventories to +4.1 from -22.2. Employment worsened to -8.7 from -6.7. The percentage of firms reporting employment decreases was 22% vs. those reporting increases at 14% - a number sure to cross the desk of the FOMC doves this morning. Treasurys have had a tough May, but they're bouncing today, TLT +1.2%. The leveraged bear ETF: TBT -2.4%. Stocks give up early gains (DIA -0.2%). 6 Comments
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9:45 AM The Bloomberg Consumer Comfort Index slides to -30.2 from -29.5 last week, breaking a 4-week run in the negative 20s. A separate measure of expectations showed 32% say the economy is getting worse, the fewest in a year. Looking at the CCI by age group, it's those in the 18-34 group with the worst views - a negative 33.6 vs. 35-44 year olds at -10.7. Among regions, the West at -39 compares to all other areas of the country in the -20s. Comment!
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