November 18, 2022
REVIEW AND PREVIEW
Global banking giants are starting a 12-week digital dollar pilot with the Federal Reserve Bank of New York. Earlier this month, Michelle Neal, head of the New York Fed’s market’s group, said it sees promise in using a central bank digital dollar to speed up settlement time in currency markets. – Lananh Nguyen, “Banking Giants and New York Fed Start 12-Week Digital Dollar Pilot,” Reuters, November 15, 2022.
St. Louis Federal Reserve President James Bullard said Thursday that “the policy rate is not yet in a zone that may be considered sufficiently restrictive.” He suggested that the appropriate zone for the federal funds rate could be in the 5% to 7% range, which is higher than what the market is pricing. – Tanaya Micheel and Alex Harring, “S&P 500 Closes Higher on Friday, but Ends Week with Losses,” www.cnbc.com, November 18, 2022.
The DJIA followed the lunar cycle to a ‘T’ last week with a new high on Tuesday and a low on Thursday, followed by another healthy rally on Friday. Tuesday was the day of Venus trine Jupiter (‘Law of Abundance’ signature) and Thursday was the Moon in Virgo headed to the Mars/Neptune square. The U.S. stock markets basically paused their prior gains since the primary cycle low of October 13, when Mars also squared Neptune. It’s doing it again this weekend, only this time Mars is retrograde and the market is closer to a new cycle high than low. Continue reading…
June 17, 2022
NOTE: U.S. markets are closed Monday in observance of the Juneteenth holiday
The Nasdaq Composite and S&P 500 led a mixed market Friday, while the Dow Jones Industrial Average pulled back as investors wrapped the worst stretch since the pandemic amid inflation and recession fears. In commodities, oil fell 9.2% to $109.56 per barrel for the week. – “U.S. Stocks Close Our Worst Week Since the Pandemic,” www.foxbusiness.com, June 17, 2022.
The Fed has a classic dilemma. Inflation is mainly driven by either prices it cannot control (commodity related) or prices no one pays (owners’ equivalent rent, which is signaling a rising price of home ownership when most US homeowners pay a lower price than two years’ ago). Many prices the Fed can influence are in disinflation or outright deflation (over 3% of the CPI basket has year-on-year deflation). The Fed’s dilemma is how much more deflation to create in prices it can control, to offset the inflation in prices it cannot control. Dr. Paul Donovan, economist, “How Much Deflation?” UBS Morning Audio Comment, www.ubs.com, June 13, 2022.
REVIEW AND PREVIEW
This is getting pretty ugly. You get the feeling that Jamie Dimon and Elon Musk might be right when they stated in the last couple of weeks (and quoted here), regarding financial markets, something like: “Houston. Houston! We have a problem.” Continue reading…