Tax collections fell in June as the Trump Tax Cut continued to bite into federal revenues. The fall in tax collections combined with the rise in spending stemming from Congressional Budget Busting Agreement signed by Trump, is causing an increase in Treasury supply. Meanwhile increased debt-financed deficits have kept the US economy running hot, but…
Liquidity Trader Pro Complete
Reports on the Fed and Treasury, primary dealers, foreign central banks, money market and mutual fund flows, and other factors that affect market liquidity. Includes all reports from Federal Revenues Pro Trader, Macroliquidity Pro Trader, and Treasury Supply and Demand Pro Trader. Click here to subscribe. Subscribers, click the post headline to access reports.
Macro Liquidity Pro Trader
Stocks Most Overbought Since January Peak
by Lee Adler •
The only thing that has changed since my last monthly review of the macro liquidity data is that stocks have rallied. That has returned them to their most extended position versus liquidity since the January market peak.
Treasury Supply and Demand Pro Trader
Here’s Why It’s Important That Stocks and Bonds Rallied Despite Tightening Liquidity
by Lee Adler •
Monthly deficits have exploded since passage of the tax cut and Congressional Budget Busting Agreement. However, June was a tax collection month, padding the Treasury’s cash account. That allowed the Treasury to pay down a few T-bills in June. But there was still a big year to year increase in supply. Despite that, stocks and…
US Federal Revenues Pro Trader Report
Tax Collections Remain Weak Except At the Top – Why That’s Bad News
by Lee Adler •
Federal tax revenue has cratered thanks mostly to the big reduction in corporate taxes, but withholding taxes have also been weak. Meanwhile, strength in excise taxes and non withheld individual income taxes suggest that the economy is booming in some sectors, enough to keep the Fed on its tightening course. But what you really need to…
Macro Liquidity Pro Trader
Fed Balance Sheet Says I’ve Fallen and I Can’t Get It Up
by Lee Adler •
By the end of the year the Fed will have withdrawn $450 billion from the banking system if it sticks to its published schedule. The annual bloodletting will then plateau at $600 billion per year until the balance sheet reaches a tight reserve position. We have seen the effects in the money markets and we’re…
Treasury Supply and Demand Pro Trader
Here’s Why Any Rally In Treasuries Is Now Really Bad News For Stocks
by Lee Adler •
Treasury auction demand has risen but it has not kept pace with the increase in supply over the past month. That’s a bad sign for your stock portfolio. Here are the particulars.
US Federal Revenues Pro Trader Report
US Defecates Bigger As Tax Collections Drop Like A Stone And Spending Explodes
by Lee Adler •
Tax collections fell in May thanks to the Trump Tax Cut. The budget defecate widened on that and massive spending increase under the Trump-Congress BBA (Budget Busting Agreement). Here’s what that means for the markets.
Macro Liquidity Pro Trader
Stocks Try To Buck Macro Liquidity Turning Flat
by Lee Adler •
Macroliquidity is flattening as the Fed withdraws money from the banking system and extinguishes it. That means that there is less and less money available to absorb new securities issuance, particularly US Treasuries. Bonds have been pummeled. But sellers of bonds used the liquidity generated by US commercial bank and foreign central bank buying to…
Treasury Supply and Demand Pro Trader
The Noose Tightens
by Lee Adler •
The Treasury ramped up its pounding of the markets over the past month, and there’s no respite on the horizon. At the same time, the Fed is pulling money out of the system, with an increase in the rate of withdrawal scheduled for July. So the noose is tightening and the hangman stands ready.
US Federal Revenues Pro Trader Report
May Federal Tax Collections Plunged
by Lee Adler •
Withholding tax collections dropped sharply in May, reflecting the impact of the new tax law. But excise taxes were up sharply. Here’s what it means for the markets.