Market Conditions

One Hour After Taking Office, Trump Suspends FHA Mortgage Fee Cut

In a move that has sparked controversy among some economists, within an hour of being sworn in, Trump undid one of Barack Obama’s last-minute actions, a mortgage-fee cut under a government program catering to first-time home buyers and low-income borrowers.

Beige Book Notes Minimum Wage Increases, Warns Of Building Margin Pressures

The Fed's latest beige book, perhaps the most boring report released by the Federal Reserve, found 10 of the 12 Fed districts growing at the now ubiquitous "modest or moderate pace" with Cleveland growing only slightly and New York reporting little change for the fourth period in a row.  However, despite stagnant growth, margin pressures are building as input prices are rising faster than final goods prices.

Oil Slides After Saudis Suggest Early End To OPEC Deal

Following a brief spike overnight (as China intervened in its equity market), crude prices slipped lower, testing towards a $51 handle after Saudi Arabia says OPEC is on track to wrap up its production curbs by the middle of the year, potentially leaving its aim of clearing a global oil glut unfinished.

Fed's Labor Market Conditions Index Plunges Most In 7 Years

While mainstream media clung to The White House spin of record monthly streak of jobs gains after Friday's payrolls, The Fed's own Labor Market Conditions Index (LMCI) paints a very different picture of the health of the American job market. With a 0.3% drop in December, the LMCI is now down 5.8% year-over-year, the biggest plunge since Jan 2010.

What Keeps Goldman Up At Night About 2017

Between China, credit markets, financial conditions, political uncertainty, the consequences of Brexit, the presidential elections, global trade, the risk of sharp reflation, and the impotence of central banking, here are the top things that keep Goldman Sachs up at night about 2017.

2016 Year In Review

We started this year with the economy deteriorating and finished it with the second interest rate increase in ten years. There were a lot of ups and downs along the way, but ultimately 2016 was defined by three key story-lines:  1) Brexit 2) The Presidential Election 3) Fed Policy. The first two events were votes that shocked the world. The stock market’s reaction to each was arguably even more shocking. 

What's Driving Rates?

While the bump in rates has been fastened to the recent election of Donald Trump, due to hopes of a deficit expansion program (read: more debt) and infrastructure spending which should foster economic growth and inflation, it doesn’t explain the global selling of U.S. Treasuries.

Philly, Empire Feds Smash Expectations On Soaring Optimism Despite Deterioration Labor Conditions, Inflation Spike

There is seemingly no stopping the runaway train that is the economic momentum of the past month, as confirmed by the just released Philly and Empire Fed surveys, which printed at 21.5 and 9.0, smashing expectations of 9.1 and 4 respectively, in fact printing above the highest estimate for both reports, and well above the recent print of 7.6 and 1.5. The one blemish was the sharp drop in labor market conditions at the Empire Fed, which saw a big drop in both employment and hours worked.

BofA Warns Trumpflation Might Break The "Buy The Dip" Trade

A strategy of holding cash and buying any 5% dip in S&P until markets retrace the loss has outperformed the S&P consistently since 2014, but as BofAML warns, the changes in inflation market dynamics post-Trump may "handcuff" The Fed and pull a key support out of the market that helped create the "buy the dip" trade.