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 Close to a “Goldilocks” report —warm enough to reassure investors that the U.S. economy is chugging along, but not so hot that it dissuades the Federal Reserve from continuing to cut rates at a gradual pace Investors should remember that even Goldilocks didn’t have long to enjoy her porridge before the bears showed up.   Wall Street Journal 5 October 2024 https://www.wsj.com/economy/central-banking/us-economy-jobs-goldilocks-moment-4ecc105f Tillbaka till Wall Street och Stockholm 7 oktober 2024 https://englundmacro.blogspot.com/2024/10/wall-street-och-stockholm-7-oktober-2024.html

  Stock market sees boom but bonds see economic disaster  Equities reflect expectations for soft landing, ... while other assets indicate growth ‘is slower than we think’ Bob Elliott, CEO and CIO of Unlimited and a former executive at hedge-fund Bridgewater Associates, highlighted these “mixed messages” in commentary shared with MarketWatch earlier this week. “The bond market seems to be predicting an economic disaster,” Elliott said of yields on longer-dated Treasurys.  “Meanwhile, the stock market anticipates the greatest tech boom in over 100 years,” Joseph Adinolfi MarketWatch 22 August 2024 https://www.marketwatch.com/story/stocks-and-bonds-are-sending-conflicting-messages-about-where-economy-is-heading-next-d6bbd199

  Mpoxpatient i Sverige – första utanför Afrika Det första fallet av sjukdomen mpox av den mer allvarliga varianten har konstaterats i Sverige, meddelar socialminister Jakob Forssmed (KD) på en pressträff på torsdagen. Det är det första fallet utanför Afrika. ”Det är förstås någonting vi tar på allvar”, säger Forssmed. DI 15 augusti 2024, 18:02 https://www.di.se/nyheter/mpoxpatient-i-sverige-forsta-utanfor-afrika/ Ett fall av mpox klad I rapporterat i Sverige — Folkhälsomyndigheten (folkhalsomyndigheten.se) The Sky is the limit S&P 500 erases August losses as ‘irrational recession fears’ fade - MarketWatch New York-börserna steg och såväl S&P 500 som Nasdaq  raderade ut hela augustiraset https://www.di.se/live/detaljhandelsgladje-lyfte-wall-street-sminkbolag-rusade-tvasiffrigt/ Men räntorna steg 10 Y 10 Y 3m I takt med att räntorna steg sjönk också förväntningarna på att Fed ska leverera så pass stora och snabba sänkningar som marknaden prisat in de senaste veckorna. N...

  The mayhem that broke out in financial markets last week.   As stock markets plunged, there was a mad rush to explain the correction by way of the “fundamentals”, and in particular the possibility that the US economy is not as strong as previously assumed and may even be slipping into recession. It’s all the fault of the Federal Reserve, many pundits said. In attempting to quell inflationary pressures, policymakers had held interest rates too high for too long and are now about to reap the whirlwind by tipping the US and world economies into recession.  The hoped-for “soft landing” was transmogrified into the hardest of crashes. In the event, the whole thing was over almost before it had begun.  There’s plenty of evidence of a slowing economy, but not much of an outright recession. No immediate need, then, for the Fed to come riding to the rescue, even if it is now under the strictest of instructions to urgently start cutting rates at the next available opport...

  Det blev en ny, illröd dag på Wall Street.  Indexen försvagades i sluthandeln och  stängde på lägre nivåer än vid Stockholmsbörsens stängning. https://www.di.se/live/blytung-borsdag-i-new-york-teknikjattar-rasade/ Morgonkoll: Sur Tokyobörs sänker humöret i Asien (di.se) Börsen har nu rasat 7,5 procent på bara tre dagar och  är på den lägsta nivån sedan början av mars. Victor Hultgren DI 5 augusti 2024, 17:31 https://www.di.se/live/kraftigt-borsfall-trots-viss-aterhamtning / Nasdaq 5Y Om man höjer blicken är nedgången, hittills, liten i jämförelse med den tidigare uppgången.   ”Magnificent 7”-bolagen väntas tappa 13.000 miljarder Stockholmsbörsen öppnade ned 4,9 procent för att nu falla med 4,1 procent.  David Levin DI 5 augusti 2024, 14:34 ”Magnificent 7”-bolagen väntas tappa 13.000 miljarder (englundmacro.blogspot.com) The fact that one can hardly see last week's decline on this chart says a great deal about full-cycle risk. Hussman på X (englundmacro.bl...

Slower Hiring Boosts Hopes of a Late-Summer Rate Cut   Antal sysselsatta Sam Goldfarb Wall Street Journal 3 May April 2024 https://www.wsj.com/economy/jobs/jobs-report-april-unemployment-a8a1ac1a Stocks, bonds popped after Fed chair says rate hike unlikely https://englundmacro.blogspot.com/2024/05/stocks-bonds-popped-after-fed-chair.html ‘Breaking something somewhere’ This is a data-dependent Federal Reserve. And so, quite logically, that makes the market data dependent as well. We’ve seen that a thousand times, with each little bit of new information whipsawing stocks and bonds. Today’s jobs report was no different  That roller coaster ride in US markets, Mohamed El-Erian said, threatens to become a growing problem, even with a payrolls print “that will please the Fed and please the markets.” “This volatility in interest rate structure — it is causing havoc elsewhere in the world when US rates swing as much as they do on a short-term basis,” said El-Erian, the president of Qu...

America rapidly restored full employment while experiencing a one-time jump in the level of prices without a sustained rise in inflation, the rate at which prices are rising.  Not bad, especially considering all the dire predictions made along the way. What actually happened was that the economy proved far more resistant to higher interest rates than the Fed expected, so growth kept chugging along and unemployment didn’t rise significantly.  But inflation fell anyway, coming in below the Fed’s projections.  So the economy surprised the Fed in two ways, both positive. Disinflation, it turned out, didn’t require a bulge in unemployment; but rate hikes, it turned out, didn’t damage employment as expected. Yes: Policymakers stumbled into Goldilocks. Paul Krugman newsletter New York Times 9 April 2024

“Huge fiscal spending, the trillions needed each year for the green economy, the remilitarization of the world and the restructuring of global trade—all are inflationary,” Dimon wrote. He said JPMorgan is preparing for a range of scenarios where rates could drop as low as 2% or head to “8% or even higher,” based on where the economy is headed. He has warned about inflationary risks in previous letters, in both 2022 and 2023, too. Dimon said an outcome, which implies that inflation quickly returns to the Fed’s 2% target from higher levels now, is less likely than subdued bond yields and record stock indexes would seem to imply.  “These markets seem to be pricing in a 70% to 80% chance of a soft landing,” Dimon wrote.  “I believe the odds are a lot lower than that.” Wall Street Journal 8 April 2024 https://www.wsj.com/finance/jamie-dimon-warns-u-s-might-face-interest-rate-spike-83789da7 Dear Fellow Shareholders, https://reports.jpmorganchase.com/investor-relations/2023/ar-ceo-le...

Powell says Fed has time to assess data before cutting rates Recent bump in economic data doesn’t change Fed’s overall view Tight monetary policy is weighing on economy, Powell says Market reaction is muted as Fed chair speaks at Stanford https://www.bloomberg.com/news/live-blog/2024-04-03/fed-chair-powell-speaks-at-stanford

Belief in a hard landing in the US is over.  Doubters may now predict a soft one, but markets are positioned for no landing at all. Stock market bears have given up. That shouldn’t be a surprise after the S&P 500 has closed at yet another all-time high. I ts current run without a pullback of even as much as 2% now stretches to five months.  But the details of just how they came to throw in the towel, and what they now expect, are a little surprising. The key economic call is that a recession within the next 12 months is no longer viewed as a certainty. At present, it appears the bond market still thinks there’s a recession coming, while only about a third of economists agree. To be clear, if we really are out of the economic woods, and the US can get through this cycle without a recession — that’s amazing. John Authers Bloomberg 28 mars 2024   https://www.bloomberg.com/opinion/articles/2024-03-28/stock-market-bears-finally-throw-in-the-towel-on-a-hard-landing Vi ...

The challenge of retreating without tipping into a recession, or allowing price rises to return.  For central bankers — stranded with policy rates far too high for their comfort but reluctant to take the risk of cutting them — the analogy /with Descending a mountain/ is doubly uncomfortable.  Descending a mountain is more hazardous than the ascent. That’s when accidents happen. To track the climbdown, Points of Return is launching The Year of Descending Dangerously, a suite of indicators that we will update monthly.  The chances are that it will take longer and move more slowly than many now seem to anticipate John Authers et al. Bloomberg 26 March 2024  https://www.bloomberg.com/graphics/2024-opinion-rate-cuts-covid-inflation-central-banks/ The phrase “nasty, brutish, and short” originates from Thomas Hobbes’ book Leviathan (1651) Bing AI

26 mars 2024  S&P 500 Turns Lower in Final 30 Minutes of Trading “As momentum slows and breadth diverges, we believe the S&P 500 could benefit from a healthy pullback of at least 5% toward its 50-day moving average — a level last tested in early November,” said Craig Johnson at Piper Sandler. Stock Market Today: Dow, S&P Live Updates for March 26 - Bloomberg DI  USA-börserna handlades inledningsvis upp under tisdagen, men föll ned under nollan under kvällen.  Dow Jones industriindex föll 0,1 procent medan breda S&P 500 sjönk 0,3 procent.  Nasdaq Composite stängde på minus 0,4 procent.  Nätforumet Reddit, som börsnoterades förra veckan, rusade 9,1 procent. Aktien stängde på 65,23 dollar, att jämföra med 34 dollar per aktie i erbjudandet inför noteringen.  https://www.di.se/live/wall-street-stangde-pa-minus-trumps-mediebolag-rusade-i-borsdebuten/ 25 mars 2024 DI Efter en lugn inledning på veckan stängde samtliga USA-index på rött.  Dow Jo...

That’s because of a startling inflection in US profits, and amazing market momentum CPI print for February came in hotter than expected, yet the stock market wasn’t bothered. The US stock market has quite a head of steam, and once it has momentum is hard to stop. When the herd is running like this, nobody wants to get in the way Remember that when momentum finally reverses, it does so in a big way. John Authers 14 March 2024 https://www.bloomberg.com/opinion/articles/2024-03-14/why-us-stocks-don-t-care-if-the-fed-takes-time-cutting-rates America’s economy has escaped a hard landing   Calling it a soft landing may in fact be an understatement, for what is most striking about the American economy at present is not its deceleration but its continued momentum.  It is not just economists who are upbeat. America’s stockmarkets keep hitting new records. Corporate earnings are set to rise strongly this year. Ordinary folk, too, are growing more optimistic. The Economist 14 March ...

  Bloomberg 12 mars 2024 at 13:32 CET https://www.bloomberg.com/news/articles/2024-03-12/us-core-inflation-tops-forecasts-for-a-second-straight-month Historisk nivå: OMXS30 på 2.500 DI 12 mars 11.58 https://www.di.se/live/historisk-niva-omxs30-pa-2-500/ Årets bästa börsdag i Stockholm  Stockholmsbörsens breda index OMXSPI stängde plus 1,5 procent https://www.di.se/live/arets-basta-borsdag-i-stockholm-volvo-slog-rekord/ The 2-year yield rose 6.5 basis points to 4.597%. The 10-year rate jumped 5.1 basis points to 4.154%. The 30-year yield rose 3.6 basis points to 4.311%. Finansmarknaderna kan vara krävande. För närvarande har de prisat in en nästintill perfekt utveckling under de närmaste månaderna – inte minst i USA, där det senaste årets urstarka börsutveckling lett till höga värderingar som nu mer eller mindre kräver räntesänkningar för att överleva på sikt. Tror man – som majoriteten av både analytikerna och investerarna – att Fed slår till med en sänkning i juni finns det d...

Cross-asset weekly advance by one measure is best of the year. Equal-weight S&P 500 rises to record as more stocks join rally.  Over two days on Capitol Hill, Powell gave no evidence he is bothered by surging asset prices, which arguably work against his goal of keeping financial conditions tight enough to wring excesses out of the economy. While stocks ended Friday on a sour note with the S&P 500 finishing the week with a slight decline, the retreat came after a stretch where the index rose in 16 of the previous 18 weeks — a string of resilience not seen in five decades.  Its equal-weight cousin gained almost 1% over the five days. All told, financial conditions have loosened to levels that by some measures are easier than before Powell & Co. kicked off their battle against inflation.  With all the asset gains feeding into wealth creation, it bodes well for consumer spending.  Bloomberg 8 March 2024 https://www.bloomberg.com/news/articles/2024-03-08/powe...