Food and energy are the offending variables, this morning’s inflation report for April informed. And what does Mr. Market do with offensive data? Dismiss it, of course.
Author Archives: James Picerno
THE SPREAD SHALL SET YOU FREE
The Treasury market may be indifferent to current events in the economy, but the high-yield segment of debt securities, otherwise known as junk bonds, is focused like a laser beam these days.
THE EMPIRE STUMBLES
The first question in looking at the grim trend of decay that screams out from today’s update of the Empire State Manufacturing Survey is whether the news should be taken seriously. Pairing this numerical incarnation of negativity with competing measures of the national economy raise a conflict, effectively pitting optimism against its ancient rival of despair.
CALLING ALL CONTRARIANS
The consumer seems to have picked a timely moment last month to cut back on buying imports, an act which helped pare the trade deficit in April. Indeed, import prices rose by 0.8% last month, the Bureau of Labor Statistics reported today. That was twice as high as consensus prediction from the dismal scientists.
FROM PRUDENCE TO PROFLIGACY IN 30 DAYS
If you’re not confused when it comes to figuring out which way the economic winds are blowing, today’s retail sales report for April threatens to advance the cause of puzzlement.
PARSING THE TRADE REPORT
The U.S. Dollar Index has been marching higher in the wake of yesterday’s better-than-expected trade-deficit news. This index of the greenback in fact reached its highest mark since last November. Has the turnaround in the trade deficit that so many have hoped for finally arrived? If so, should investors celebrate or reserve judgment about the implications?
KEEPING THE FAITH
For the last three decades of the 20th century, oil and bond yields shared a stable, if hostile relationship. When the price of crude went up, so too did government bond yields. When oil prices fell, Treasury yields declined as well.
WE’RE FROM THE GOVERNMENT AND WE’RE HERE TO HELP YOU…REVALUE YOUR CURRENCY
Some in the United States believe that letting the Chinese yuan find its true value in the foreign exchange market will deliver a quick boon to America’s economy. Perhaps. But there’s reason for doubt.
SEEING IS BELIEVING
The bond market’s been reluctant to see the world through Fed-colored glasses of late, which is to say glasses that see monetary tightening as salvation from encroaching inflation. But after today’s jobs report for April, the fixed-income set is starting to focus on the world as seen by the central bank.
RETHINKING THE 10,950-DAY MATURITY FOR TREASURIES
Last month, the U.S. Treasury announced that Savings Bonds would no longer pay a variable rate. Now we hear that the defunct 30-year Treasury Bond (which was scratched several years ago when the everyone thought the government would run a budget surplus) may be making a timely (or should we say untimely?) return.