Wealth and Asset Management for You

Rightly or wrongly, Chairman Powell followed expectations and brought another quarter point hike to Fed Funds, bringing the upper range to 5%. Higher rates will make it even harder for…

March 24, 2023 – Contradictions abound as we close out the week following another volatile reaction to a Fed meeting. The Federal Reserve raised interest rates again, even though banks are begging for cash at the discount window at levels above the peak in 2008. Numerous officials preach that bank deposits are safe, but Secretary Yellen offered less enthusiasm than hoped for with her Congressional testimony. All of this adds up to more uncertainty and a range-bound market.Read More

Stocks rallied for the second straight session in front of the conclusion of the FOMC meeting today which will help to define the Fed’s future course. Bond yields rose modestly.…

March 22, 2023 – Hang on to your hats. It’s FOMC day! Fed officials face a tough call, on whether to raise rates amid current banking turmoil. Markets believe they will. But the rate hiking cycle is nearing an end. Even assuming one more increase in May, summer inflation should have cooled enough to stop the rate hikes. The strong stock market rally of the past two days suggests a belief that the cost of the current banking turmoil can be contained. Whether that is hope or truth remains to be seen. It is rare for financial crises to end until the Fed changes direction.Read More

Stocks continued to slide on Friday as a possible collapse of Credit Suisse came into focus. Unlike other banks, Credit Suisse is primarily an investment bank, with a major securities…

March 20, 2023 – UBS buys out Credit Suisse and disaster is averted once again, but markets remain skittish. First Republic seems next in line. All this comes in front of Wednesday’s FOMC meeting. Crises don’t end until the Fed changes course. A pause is in order. That would contradict previous signals. A pause doesn’t have to concede that the fight against inflation is over. It would merely be a pause. If bank failure fears can be contained, another rise in rates in May would be possible, if needed. But there is a lot of evidence to suggest it won’t be. The stock market’s course near-term is clearly binary depending on what the Fed does Wednesday.Read More

Markets rallied hard yesterday afternoon following increased intervention into beaten down banks. First, it was across the pond as the Swiss Central Bank injected up to 50 billion Francs to…

March 17, 2023 – While banks are scrounging for support, ancillary effects are becoming priced into cyclical sectors of the market as lower interest rates bring investors back to growth leaders. Quadruple options expiration and further bank concerns will drive more volatility to end this crazy week. A record breaking rush to the Fed Discount Window shows how desperate some banks are to cover recent withdrawals.Read More

Stocks rebounded yesterday, stemming the recent sharp losses that followed the bankruptcies and bailouts of several large regional banks. All 11 S&P 500 sectors finished with gains. Bonds sold off…

March 15, 2023 – Stocks rebounded yesterday, stemming losses from last week, but the recovery may be short-lived as European bank stocks are under severe pressure this morning. The failures of two banks in the last week may be the end of the crisis or the tip of the iceberg. We won’t know that for days or weeks. In the meantime, markets hate uncertainty, and the likelihood of recession has risen. Beware the Ides of March.Read More

Stocks fell sharply late last week as Silicone Valley Bank, the 22nd largest bank in the country failed. Sunday Signature Bank also failed. These were the second and third largest…

March 13, 2023 – The Fed and FDIC stepped in over the weekend to create a new lending program to save depositors of two large banks that failed since Friday. That’s an important first step, but the rules of engagement in the banking industry have changed. Banks will have to pay depositors to retain their money. The same will go for stock brokers. We are witnessing what happens when the Fed is forced to change the money landscape too quickly. Every tightening cycle has its crisis. We are in the midst of one now. Crises happen at the end of a cycle, a consequence of earlier actions. Now the Fed needs to find a new path to secure the economy and fight inflation.Read More

Recent jobs and inflation reports were stronger than expected, meaning inflation remains elevated. Futures markets were pricing in an 80% chance of another 50bp increase in Fed Funds on March…

March 10, 2023 – It is Friday Jobs Day yet again! Never before have so many backward-looking reports meant so much for markets. February CPI is next in line this coming Tuesday. Fed Chair Powell has not really changed much of his commentary; the Fed is data dependent and the Fed Funds rate will be higher for longer. However, recent stress in the banking sector may throw a wrench in their plans to raise rates much higher.Read More

Stocks fell sharply after Fed Chairman Powell warned of the possibility that the Fed might increase the Fed Funds rate by 50 basis points if economic and inflation data prior…

March 8, 2023- Fed Chair Jerome Powell spooked markets increasing the odds of another 50-basis point increase in the Fed Funds rate later this month, but calmer inflation numbers over the next 10 days could either calm or reinforce those odds. Meanwhile, both stocks and bonds remain rangebound despite yesterday’s sharp price drops.Read More

Stocks staged a sharp two-day rally on Thursday and Friday as interest rates plateaued and economic data showed continued strength in the service sector. The retreat in long bond yields…

March 6, 2023 – Friday’s employment report and next week’s CPI report are likely to set the trend for the ensuing 30 days. Both were extraordinarily hot for January but few expect a repeat. However, the service economy’s strength increases labor demand while continuing upward pressure on inflation. There are few signs yet of a slowdown in the demand within the service sector.Read More