ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
Brutal Failure Turkish President Recep Tayyip Erdoğan’s “war of economic independence” has ended in a brutal failure. The president used his central bank to fight inflation with rate cuts and lost in spectacular fashion. This experiment with unconventional monetary policy severely devalued the Turkish lira (USD/TRY) and helped to generate massive inflationary pressures. The chart below … Read more
Housing Market Intro and Summary The seasonal trade on home builders ended in the middle of one of those critical junctures for these stocks and the housing market in general. Mortgage rates are done coming down for now and could break to new highs as the Federal Reserve continues hiking short-term rates to battle inflation. … Read more
Stock Market Commentary: The U.S.’s looming debt ceiling crisis is a manufactured emergency. The whole political wrangling could end in an instant with a very simple decision to keep budget negotiations in the budget process. Thus, the stock market’s relative calm about the political stalemate does not surprise me. Moreover, who are the motivated sellers … Read more
Stock Market Commentary: In the previous week, the stock market put on a display of strength ahead of the Federal Reserve’s May decision on monetary policy. That bravado was temporarily undermined by the final blow to First Republic Bank (FRC). After a one-day pause, presumably to contemplate the implications of the lack of a coherent … Read more
Housing Market Intro and Summary The fresh hope from a peak in mortgage rates has expanded into an ever stronger spring selling season for the housing market. Despite double digit year-over-year declines keeping existing home sales and housing starts in recessions, new home sales have almost reversed all their losses since the Fed started hiking … Read more
Stock Market Commentary: On a weekly basis, the stock market seems to flip its abiding theme. One week after I accused the stock market of sleepwalking, buyers roused the major indices out of their slumber with a new and sudden display of strength. A 13.9% post-earnings surge from Meta Platforms, Inc (META) seemed to set … Read more
Stock Market Commentary: The no worries stock market is sleepwalking its way through April. The major indices are stuck in tight ranges near or at key technical resistance and support levels. Yet, market breadth remains relatively low as many of the big market leaders hold up the tent. Meandering economic data induces some of this … Read more
“We are encouraged that inflation is declining, and we are seized with the importance of staying the course and restoring price stability for Canadians. Inflation is coming down quickly and is forecast to be around 3% this summer. The economy is expected to grow modestly even as inflation comes down. This is good news, but it is not job done.” “Monetary … Read more
Housing Market Intro and Summary Real estate is local. Regional banks often sit at the heart of local communities. So it seems odd writing about the relative strength in the housing market in the wake of the Panic of 2023 that featured the historic collapse of two regional banks, Silicon Valley Bank (SIVB) and Signature … Read more
Stock Market Commentary: This stock market is one bullish bear market. A bear market perhaps cannot get more bullish than the current market. Since the October lows, the various indices have shown a general upside bias. As much time that I have spent the last several weeks looking for excuses to get bearish, the market … Read more