Trump won’t sign spending bill..markets fall AGAIN!!!—12/20/2018
Year-end historically means the Santa Claus rally. NOT THIS YEAR!!!!
Fed Chair Powell ruined the party yesterday and now Trump and Congress are taking it to another level with their fight over border security and the spending bill. Trump wants his wall to be built and won’t sign the spending bill unless he gets it. The government needs the spending bill to remain open.
Long story short…it looks like the government is going to be shut down sometime soon, unless these people can get their act together.
Fed Chair Proves His Ignorance—12/19/2018
The Fed raised rates today, as expected, and had a slightly more dovish tone regarding their ideas on future interest rates hikes. However during Fed Chair Powell’s press conference, he proved his ignorance about the market’s main concern; the reduction of the Fed’s balance sheet.
The Fed is reducing it’s balance sheet by $50 billion per month. No one is discussing this, but I believe it is the main reason for the market’s downward trajectory. This reduction is a de facto tightening of monetary conditions and is slowing the economy down. This, combined with the Fed raising rates, is a double whammy for slowing the economy.
As I watch the Fed Chair speak, every question he answers concerning the reduction of the balance sheet sends the market lower and lower and lower. He is literally clueless about the major impact this is having. He makes comments like, “its going smoothly” or “it has very little impact.” The fact that these answers push the market lower by 100 points a question, tell me otherwise.
He is the most powerful banker in the world. I sincerely hope he comes to grips with the impact the “quantitative tightening” is having on the economy very soon.
China Misses Growth Expectations—12/14/2018
China reported economic data that missed expectations and the market is selling off…again. This concern over global growth is the latest worry that has Wall Street’s attention.
Over the weekend, at the G-20 meeting, President’s Trump and Xi meet to discuss the trade tensions/Trade War between the U.S. and China. The gist of the meeting was that the Trade War will take a pause for 90 days. The world financial markets are hoping that these two leaders can come to a longer-term agreement during that time frame and these trade tensions will de-escalate.
Powell Turns Less Hawkish—-11/28/2018
Fed Chair Powell gave a speech in which he said that interest rates are closer to neutral rather than still accomodative. This has eased the markets concerns that he was going to keep the hammer down and raise rates indefinitely, which would run the risk of destroying the economy. As I type this, the Dow is up over 500 points today.
Mid-Term Elections are over…and the Market is rallying!!—11/7/2018
Last night saw the Democrats take control of the House and the Republicans retain control of the Senate. Historically, markets love a gridlocked Congress. As I type this, the Dow is up over 500 points. Looks like the market liked those election results.
Another Amazing Jobs Report!—-11/2/2018
Not only are we seeing continued jobs growth, but wages are now accelerating by more than a 3% clip.
Unemployment rate at 3.7% is the best since the 1960s and Wage Growth over 3% is the best since 2009. This economy is booming!!!