SPECIAL REPORT: Debt, Deficit, & Interest Expense (VIDEO)
Alhambra CEO Joe Calhoun discusses investor fear over debt, deficit, and interest expense.
Macro: Markets — Banks exit overnight trade and extend duration
For the first time since March we are seeing a positive correlation between bond yields and reverse repos sold by the Fed. The change started during the last week of October and has continued throughout November. The correlation in March coincided with bank failures, mainly Silicon Valley Bank and Signature Bank. In between March and the end of October, the [...]
Weekly Market Pulse: Dark Matter
It's the residual of all the stuff we can't explain. It's not that our models are wrong, it's the dark matter that's out there. - Fed Governor Neel Kashkari, referring to the "term premium" in long term Treasury yields The curious task of economics is to demonstrate to men how little they really know about what they imagine they can [...]
COVID & The Economy (VIDEO)
Alhambra CEO Joe Calhoun details the effect Covid had on the U.S. Economy.
Weekly Market Pulse: Monetary Policy Is Hard
So, is that it? Have rates peaked? Is the long bear market finally over? The market decided last week that interest rates have peaked for this cycle. And if rates have peaked then all the assets that have been pressured over the last two years can finally come up for air. Since October 18, 2021, over two years ago, investors [...]
Holding REITs in Today’s Environment (VIDEO)
Alhambra CEO Joe Calhoun explains why Alhambra has REITs in its portfolios, even in this high-interest rate environment.
Macro: Treasury refunding — We don’t need as much as we thought — yields drop
In August the Treasury Borrowing Advisory Committee (TBAC) told the market they were raising the net new money issuance recommendation for Q32023 from the initial guess of $733B to over $1T. They also announced a recommendation of $852B of net new money for Q42023. That spooked the bond market and 10-year yields jumped from 4% at the beginning of August [...]
Macro: GDPNow — a market mover
The most likely candidate for what moved markets today is the GDPNow update. The forecast for growth in Q4 dropped from an initial forecast of 2.3% to 1.2%. Of note, this is also a much slower growth than we saw in Q3. The bond market certainly reacted as yields continued to drop. The stock market appears to be reacting to [...]
Macro: Employment ADP and Jolts both good reports
A slight zig in the right direction versus September for both reports. ADP reported an addition of 113,000 jobs in October up from 89,000 in September. Even better, this was a steady increase throughout the month and not an isolated week. For the Jolts report, this number is a month stale. But it's a good one to look at because [...]
Weekly Market Pulse: Follow Buffett’s Rule
A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. - Warren Buffett, October 16, 2008, Buy American. I Am. , New York Times That was a month after the bankruptcy filing of Lehman Brothers, in the teeth of the Great Financial Crisis. At the beginning of the article he admits that [...]
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