Morning Note: Fed Implications, What We're Liking -- And -- "Keep Your Head"

Amid all of the volatility of late, curiously, one area that hasn't moved much is Fed Funds Futures; they're still pricing in 5-6 rate hikes by December:

US Equity Market Technical Update (video)

While markets and economics are what we cover herein, more importantly, our hearts go out today to all of those impacted by present events.

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Macro Update: Conditions (on balance) Weaken, But Still Low Recession Odds (video)

While markets and economics are what we cover herein, more importantly, our hearts go out today to all of those impacted by present events.

FYI, I edited out much of the original monologue in this week's update. I.e., the end product is more or less a simple (choppy in spots), succinct accounting of a handful of inputs to our macro index. I nixed where I stumbled into a bit of rambling over the global events of the day, as it's early and there's much yet to play out, and prognosticate over, should this become a protracted affair. We pray it doesn't!

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Morning Note: The Fed Appears Undeterred (for the moment)

So, indeed, that "oversoldness" we pointed to earlier in the week led to quite the bounce in equities yesterday. And/or, the notion that global angst just might lead to less inflation angst (particularly since sanctions didn't effectively hit commodity channels), and, therefore, inspire a softer central bank approach to inflation, had traders wading back in, in force.

Stocks, Ag, Base Metals, Gold, Silver, and Overall Perspective (video)

While markets and economics are what we cover herein, more importantly, our hearts go out today to all of those impacted by present events.

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Morning Note: Expectations

Sadly, there are far more important things than markets occurring on the world stage, but markets and economics are our focus herein.

Charts of the Day: Easy Come, Easy (or quickly) Go

As you've noticed, stocks have had a rough go of it these first seven weeks of 2022.

Morning Note: Stocks Testing Support

If I were judging merely by the green across my screen so far this morning, although the price moves aren't earth-shatteringly positive, I'd say somebody's talking, or cease-firing, or doing something positive with regard to the situation that presently dominates the headlines.

Chart of the Day: Along the Way to Longer-Term (in energy)

In our morning macro and portfolio session we discussed our energy sector exposure and explored whether it's time to take some off the table.

Morning Note: Let's Not Be Presumptuous

Yesterday's entry to our internal market log:

It’s 6pm on Monday, Presidents Day 2022.

News today is that V. Putin has signed declarations recognizing two “separatist republics“ in Ukraine followed by the ordering of “peace keeping” troops to both.

Macro Update: Conditions (on balance) Slowly Waning, And a Look at Stocks, Gold and Silver (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Morning Note: Same Stuff For Now -- And -- The Evolution (or lack thereof) of the Human Psyche

There's virtually nothing new of import to report this morning. I.e., markets remain on edge over the Fed and the Russia/Ukraine situation.

Morning Note: Sentiment's Waning (that 'might be' good) -- And -- Conditions Matter

Weekend commitments have me beginning our weekly macro exercise a day early this week. 

Seeing a number of pundit blurbs recently over the precipitous decline in investor sentiment, so I started this morning with scoring our own "Fear/Greed Barometer." 

Sentiment is considered a contrarian indicator among strategists, and, for the most part, we agree. However, like all things/indicators, we need to put it in the context of overall general conditions.

Morning Note: This Morning's Data Support Fed Action, Ukraine's Influence on Commodities -- And -- "Men Think in Herds"

It's been a busy morning in terms of data releases, and while we're waiting on oil inventories, on balance it supports the Fed's need to get off the dime with regard to its balance sheet and interest rates.

Morning Note: Don't Hold Your Breath

Here are a couple timely snippets from our latest commentary:

"I'd instruct both short-term bulls and bears to not hold their breath right here (this market is bound to remain uber volatile, in both directions)."

Morning Note: Global Commodity Crunch, Under-Owned (Foreign) Equities -- And -- All the More Precarious

In this weekend's video commentary we, among other things, took a look at the copper chart and explored why we're long-term bullish on the metal (and commodities in general).

Yesterday's Financial Times pulled no punches with regard to a global setup that presently screams higher commodity prices going forward. Although, as I expressed in the video, under no circumstances will the ascent be without notable volatility all along the way:

IMPORTANT Macro Update: Fed Boxed In (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

What's Eating the Market Again Today?

Yesterday I followed up on the morning note with what appeared to be the obvious main contributor to the then stock market's pain. I did so by copying and pasting from the original note. I'll do that again here, and highlight in red what is presumably bothering equities today.

Morning Note: Short and Sweet -- And Why We Do Technical Analysis

Keeping this morning's note short and "sweet" before jumping into our weekly macro deep dive (there's much to parse this week).

What's Eating the Market Today?

In this morning's note I noted the following (allow me to highlight [in case you're wondering] what seems to be troubling the stock market this session):

Morning Note: What to Expect on "Reported" Inflation Going Forward -- And -- One "Well Known Casualty" of the Fed's "Success"

So, we could get deep into today's CPI number and separate the components -- food's up X, used cars Y, household furnishings, energy, services and so on -- but suffice to say that nothing's getting any cheaper these days.

Morning Note: S&P Technicals Improving -- And -- Oh My!!

While the major US equity averages are still minus on the year, they're notably less so versus just a couple weeks ago. And while, perhaps at the margin, concerns around Russia/Ukraine influenced January's early trading, suffice to say that the prospects for the Fed pulling what for quite some time seemed like a perpetually-full punchbowl largely explains the angst.

Morning Note: Futures Trader Sentiment, Copper's "Real World Reality" -- And -- A Bit of Irony For Ya

Each week we track futures speculators' positioning among 33 different indices, commodities and currencies.

Looking specifically at U.S. equities, the sentiment among those who do their bidding in the futures market has waned of late.

Morning Note: No IT Deflation (so far) This Go Round -- And -- "We're Out of Everything", Says Goldman...

Often during client meetings I'll point to the large monitor on my office wall, not always to discuss a featured graph, but at times to discuss the monitor itself -- the fact that it costs a mere fraction of what its far inferior predecessor would've run me, say, 20 years ago.

Yes, one key deflationary feature of all of that productivity-enhancing information technology has been its own declining price over the years. 

Macro Update: Mixed All Over (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Morning Note: Yep, It's Time to Drain the Punchbowl

Well, we can scratch the notion (explored yesterday) that Omicron will do a number on the jobs number. At least that's the reading from this morning's "Employment Situation Report." 

The consensus was for 125k jobs added in January, but, particularly after ADP's report showing a 301k decline, expectations were all over the place. The actual number was +467k.

Stocks and Dollar Quicktake (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.

Morning Note: Jobs Anomaly -- And -- Rings Familiar

ADP's private payrolls report was a shocker this week; showing a loss of 301k US jobs. Expectations were for a 180k increase. Clearly, all of those anecdotes about closed coffee shops, etc., during otherwise peak hours, for lack of available workers (read Omicron, and perhaps confident workers) explains the anomaly that has an economy that sports a record 11 million job openings losing jobs at a clip that is exceedingly rare outside of recessions.

Morning Note: Manufacturing Still (relatively) Strong, But So's Inflation -- And -- A Critically Important Insight

Yesterday's release of the January ISM Manufacturing report tells of a bit of softening in terms of overall activity among the nation's factories. 

Morning Note: Headwinds Presently Prevail

At the end of each month we score our newest barometer; the PWA Equity Market Conditions Index. With it we assess the present signals/state of affairs expressed by the US dollar, interest rates, monetary policy, fiscal policy, US equity valuations, sector leadership, macro conditions, the geopolitical landscape, S&P 500 technicals, US equity market breadth, market sentiment and credit market conditions.