When Yields break higher:• Risk Free Rates provide much better returns than recent past (~15 yrs)• Compare risk/reward – what is ERP? Is it worth taking on risk?• Paying down “bad” debt or avoiding taking on “new” debt at higher rates is prudent
When Yields break higher: Read More »
Inflationary pressures persist even after supply chain issues have been rectified as this will “take time.” Services inflation still elevated & labor market tight. (We already knew this) Supply Chains Have Healed Yet Their Mark on Inflation to Endure https://bloomberg.com/news/articles/2023-02-26/supply-chains-have-healed-yet-their-mark-on-inflation-to-endure…
Recency BIAS & application to market: Buy the Dip It has worked RECENT 13+ yrs during expansionary phase (low rates & high liquidity) but this time period is contractionary. The way this policy changes now is through CRISIS. Don’t fall for Recency BIAS.
Recency BIAS & application to market: Read More »
PCE January 2023 PCE 5.4% Y/Y, +.6% M/M vs +.2% last moCORE PCE 4.7% Y/Y, +.6% M/M vs +.4% last mo Remember FED watches CORE PCE closely. RISING M/M significantly and FED Watch tool reflecting NO CUTS now in 2023! (finally!) FED FUND FUTURES at 525-550 bps with NO
It is always about the change. What is the pattern of the change that we see? Is there noise or do we see a consistent pattern emerging? Looking at CME FED Watch Tool which has been significantly effective in predicting the FED’s rate hikes, we are witnessing a change to higher. In the chart we
It is Changing to HIGHER Rates Read More »
I am long $ON – great company with good fundamentals. (reduced position sizing) Why did they propose a private offering of $1.1B of conv senior notes? To repay up to $1.086B of exist outstanding indebtness under $ON term loan “B” Facility which “ACCRUES INTEREST AT FLOATING
It is all in the language…Powell’s language that is. Per CME’s FED Watch Tool, 25 bps has about 99% probability so what we need to listen to is what and how Powell says it at his briefing at 2:30PM EST and how he answers the questions presented. I find a lot of value with how
PreFOMC Wednesday Feb 1 Today Read More »
Tight labor market but a greater number of workers still remain outside the labor force. Did you know? First, what is meant by “labor force”? Let’s define it. The LF is made up of people who currently hold a job or are actively seeking a job. Therefore, a person who is not employed and also
Greater Number of Workers Outside Labor Force? Read More »
There is a DISCONNECT from mismatched expectations on both sides between businesses and workers. We have on one side: Businesses unwilling to pay competitive wages and on the other side: Workers overestimating their skills or holding out for all-remote work This makes for NOT an easier time for hiring. There are challenges on BOTH sides.
STALEMATE in Labor Market Read More »
*PreFOMC Thoughts It is in the language more than the rate hike… Risk-Free Rates, ERP, and meaning for SPX earnings yields and prices! Read more for FREE on my website… https://rosannaprestia.com/article/377714
