The CBO (Congressional Budget Office) confirmed it in a report issued April 9. It projects massive and growing deficits for the next 8 years. That’s stimulative for the economy but bad news for the stock market, which the Treasury just goosed to the tune of $114 billion. Here’s the story, and why it’s ultimately bearish.
The Fed is on course with its balance sheet shrinkage program that is designed to eventually “normalize” this size of its asset base at a tight reserve position. As expected, the effects are showing up in the markets. Here’s why it will get worse.
Withholding tax collections continued their decline in the month ended March 30, as employers adjusted their withholding to the new tax law. At the same time, excise tax collections are booming. Here’s why this is all bad news for the markets.
The charts suggest that bonds should rally here. But that will be bad news for stocks. Here’s why, along with a rundown of Treasury demand indicators and charts that tell the story.
The Treasury continues to pound the market with massive amounts of new supply. This month, Treasuries held their own but stocks did not. The rotational liquidation that I have been warning about is here. And it’s going to get worse. Here’s what you need to know to protect yourself.
The effects of the Fed’s draining operations have begun to be expressed in the market and we are still in the early stages of the program. Here are the charts and explanations that show what is happening and what to look for in the months to come.
Tax collections fell slightly year to year in February. The IRS published new withholding schedules early in the month and employers began adjusting withholding tax collections. Year to year comparisons for purposes of estimating the strength of the US economy will be questionable until January 2019 because it is all but impossible to accurately adjust…
European bank assets and deposits surged in January. At first glance the massive increase was inexplicable. And it should not have happened at all because the ECB just made a huge cut in its QE purchases. Digging into the various line items of the European banking system balance sheet, it became clear what had happened.…
The 3% level on the 10 year yield is obviously critical. It may take a while to clear that level, but here’s why the pressure on stocks will grow once it’s broken.
The TBAC has told us to pay no attention to its quarterly supply schedule forecasts. No wonder. They just underestimated February supply by over $100 billion. And the numbers for the rest of the first quarter and the second quarter are so scary, they don’t want us to look. Here’s what this means for the…