Investors tend to think of stocks and bonds as negatively correlated, with stocks doing well in positive growth environments and bonds doing well when growth slows or declines. And that was largely true for the last quarter century. But earlier this year, the trailing three-year correlation between stocks and bonds turned positive for the first
Keep an eye on the spread between 30-year mortgage rates and the 30-year U.S. Treasury yield. Since 1990, it has only been this high three other times… 2Q 2000, 4Q 2008. and 1Q 2020. Each of those marked a major inflection point for the S&P 500 Index…
In straightforward absolute terms, without comparing to bond yields, equity valuations are again getting hard to ignore. In the 12 months to the end of August, the S&P 500 managed a price return of 14%. Of that, increasing price/earnings multiples accounted for 12.4 percentage points, according to a decomposition by Patrick Palfrey of Credit Suisse
Great chart from @NancyRLazar1 of @Piper_Sandler this morning. Excess Savings. “They’ve already declined sharply, set to hit $0 by Halloween. Surging student loan interest payments will hasten that drawdown.”
From Goldman, potentially three big hits coming to economic activity. Student loan resumption, UAW strike, and government shutdown.
The resurgence of labor market participation is yet another indicator of potential inflationary problems in the system. A similar pattern occurred back in the 1970s when rising living costs compelled households to rejoin the labor market. The term “The Great Resignation,” frequently highlighted by the media, is fundamentally rooted in looking at the past. We
Move over Long Island Iced Tea turned Long Island Blockchain… h/t @TedHZhang And, yes, there’s a sentiment indicator in here somewhere…
The Internal Revenue Service made its biggest moves yet to stop what officials say is a wave of fraudulent and overstated claims for a pandemic-era tax break, including an immediate halt to processing new refund requests. New claims for the employee retention credit, or ERC, won’t be processed until at least 2024, the IRS announced