There are still questions about the real x-date. Is it around June 1 or is it around late July?... Read More
Individuals and foreigners are chasing higher Treasury bill yields and buying record amounts. It confirms the trend of a "bank walk" out of low-yielding checking accounts.... Read More
The Fed has signaled they may be done hiking rates. What do market-based measures suggest?... Read More
As inflation remains at elevated levels, the correlation between stock and bond returns is a telling sign on investors' thinking.... Read More
While it might seem the S&P 500 is off to an outstanding start to 2023, considering the risk and uncertainty the economy currently faces, most stocks are struggling. Eight stocks have provided nearly all the returns for the index this year.... Read More
For the last few decades we have been in a low interest rate environment where deficit spending would not cause major issues. However, a 40-year high in inflation prompted the Fed to tighten monetary policy at a fast pace. Higher rates mean the cost of servicing U.S. debt will follow higher. ... Read More
First Republic’s earnings report yesterday was a disaster, which is why the stock is crashing to a new low. The Street was thinking they were going to show a $40 billion deposit outflow. Instead they report a $70 billion NET... Read More
The T-bill yield curve continues to be an important metric to watch. The distortion in the shortest maturities is a result of buying, not selling of bills around the debt ceiling's X-date. This is more about deposits leaving banks for money market funds than concerns over a potential default.... Read More
The current state of the economy, the level of inflation, and what the Federal Reserve is communicating to markets are irrelevant. Instead, the million dollar question is, "what will be the impact of the bank walk on lending and the economy?" We believe a continued flight of deposits will create a significant economic drag later this year.... Read More
Houses sold at a median $217 per square foot in March, down from $231 per square foot in May 2022. However, this is still roughly $55 higher per square foot than pre-pandemic levels. Interestingly, list prices per square foot (green) are creeping higher once again.... Read More
ETFs represent an important part of equity markets, allowing everyday investors to capture different types of market strategies with just one investment and minimal fees. These are most often passive investments (allocators), yet active ETFs (traders) have become more common in recent years. ... Read More
Many believe the steep T-bill yield curve and the spread between 3-month and 1-month T-bill yields are signs of concern over the debt ceiling. While this may be partially true, the flood of money away from banks and into money market funds is also creating extra demand (and lower yields) for 1-month T-bills.... Read More
Tomorrow, April 18, is the deadline for filing taxes in the US. This event greatly impacts bank deposits. History suggests $250 billion can flow from bank accounts to pay taxes. After that, we believe depositors will act rationally and use their mobile apps to move from low-yielding bank accounts to high-yielding market-based accounts. Over time this will lead to a credit crunch.... Read More
A study of market performance under various inflation and deflation scenarios since 1801... Read More
Market participants are facing a crisis of 'unknown unknowns.' Most would expect volatility measures to reflect this uncertainty. However, looking at the VIX Index, you would suspect a calm market. This is far from what we have seen in the past two years. ... Read More
On today's episode of On The Margin Jim Bianco of Bianco Research joins the show to discuss the fallout of SVB's collapse, and the turmoil that ensued in the banking system. Arguing that rates are currently too high for banks, how will the Fed be forced to react whilst managing both financial stability and inflation. ... Read More