Well we got the lower inflation number this morning as the consumer price index (CPI) came in cooler than expected. Did that help equities skyrocket higher? Yes for about an hour and then folks said get me out! The S&P500 is now around even on the day–after being up 1%–of course with this market we will have wait and see if there are dip buyers out there.
You would think the 10 year treasury yield would have fallen a little bit with the good news–nope. The 10 year treasury is dead flat at 4.30%. I don’t think that bond buyers are thinking the ‘fiscal house’ is in order yet–certainly investors are NOT going to be heavily swayed by a singular inflation number. Government spending isn’t contained–and maybe never will be so why would investors get real excited about 1 number. Maybe all congress will understand is a lack of buyers for all their debt.
Over on Yahoo Finance I got sucked into clicking on a link to this ‘story’ (below). It caught my eye because of ‘worst slumps in history’ verbaige. Yes it has been painful. Yes if you are 25 years old you think this is really bad–and no doubt it has been painful for many folks. So I checked the author–maybe 30 years old and writes novels. No blame for the author as he is just trying to make a living–but really TipRanks is not where I ever go for my economic news–just clickbait. Well if this pullback is one of the worst slumps in history I wonder what all the bear markets we have lived through would be called?
S&P 500 Faces One of Its Worst Slumps in History – Is Trump’s Trade Policy to Blame?
Yesterday I did manage to buy some of the Priority Income Fund 6.625% term preferred (PRIF-F). It wasn’t easy and overall I had to pay more than I wanted at $24.60 and $24.66, but regardless it still fits in my wheelhouse with a potential redemption in the next year and a relatively short time frame even if it is not redeemed early. Just looking at the issue it has jumped and now is trading at $24.98.
10 year TLT price hit technical resistance at the 200 day moving average. Breaking and holding above would basically confirm the recession is real and move the price action into a larger degree price move. The market is not quite ready for that yet.
No more, no less. Also some rumblings, that Canada is selling their US treasury holdings.
Is your sale different than this sale?
“Government of Canada plans to issue US-dollar global bond
From: Department of Finance Canada
News release
March 10, 2025 – Ottawa, Ontario – Department of Finance Canada
In Budget 2024, the Government of Canada reiterated its commitment to maintain liquid foreign reserves at or above three per cent of nominal gross domestic product.
To support this commitment, the Government of Canada today announced its intention to launch a US-dollar-denominated global bond tomorrow, March 11, subject to market conditions.
Launching a global bond provides funds to supplement and diversify Canada’s liquid foreign reserves, which serve as a source of prudential liquidity and help promote orderly market conditions for the Canadian dollar in foreign exchange markets.
This US-dollar global bond will further strengthen the stability of Canada’s foreign currency reserves while meeting investor demand for high-quality assets backed by Canada’s triple-A credit ratings from most major credit rating agencies.”
At least there’s one country in North America rated AAA
Haw! Well the author was not certainly not around during the Fed Chairman Volker recession years, 1980-82 was a period of 16% interest rates…I had no idea what $ was back then. I do remember my rich buddy buying 16% T Bonds at 10K a clip! Me well I was just out of college a few years, unemployed living with my Mom! This author has no idea what a shitz storm is!
Please consider this more of a sociological comment than a political one but who else has noticed how in this day and age EVERYTHING is touted as the Best or the Worst in the entire universe or like nothing else the world has ever seen before? Anyone watch college or NBA basketball? Count the number of times the talking heads describe this or that as the best or worst at something or other, or anything ever seen in all of history…. I remember watching some college kid come down with a rebound and knocking someone to the ground with his elbow on the way down…. The talking head actually said after that that the rebounder had “the heaviest elbows in all of college basketball.” Really! The point I guess is that we seem to be in an era of extreme hyperbole, like Tim’s quoted headline…. I can’t help but wonder whether the trend emanates right from the top.
You are a generational talent when it comes to understanding a prospectus –the best ever. However, it’s a shame that you have confidence in Barry Sloane.
Ha! My confidence only needs to be confirmed thru 2/1/26….
If you come to Vegas, we have hundreds of “World’s Largest,” but the one thing that is guaranteed to be a lie here is anything that self-desrcibes as “Luxury!”
Maybe this was just a rotation out of extremely overvalued MAG7?
Perhaps also just a reset given Market expecting lower inflation past several weeks pricing in today’s print (evidenced by lower long term rates) and given equities are inflation/liquidity proxies due to the assets they hold (i.e. factories and such). We should all be more worried about out of control run UP in stocks. This correction feels healthy to me.
Duration is the contrarian trade right now.
Funny I was out of school around 1979 and had my first full time job. I followed the DJIA and not the other indices and I haven’t changed much as I still look at the DJIA first. Good chance we might see a 10% correction off the Dec high by the end of the week. All our accounts are down, but the income is still coming in and nothing we own has cut or suspended any dividends. I can truthfully say I have no capital losses except on paper because I haven’t panicked and sold. So far what I am holding are solid so no reason to sell and take a loss. But I will sell at a loss if there’s a change in the stock I am holding and it starts causing me to be concerned
Funny Charles because I hardly ever pay attention to the DJIA–I used to but not anymore, although I have seen it on the national news every evening as they talk about markets ‘crashing’.
I know, funny isn’t it.
I just watch and keep a list of stocks I follow on the right side of my screen. Some I don’t even own. Overall I saw the futures green then the market opened up red and kept falling. Then the buyers stepped in when it was safe and looking oversold.
The CPI data is already old, but it calmed some nerves. I see the thinking behind some of it or at least my uneducated guess.
Oil futures are up because people think the economy is okay and demand will be there. Myself I am whistling as I walk down a dark street and wonder what would happen if Russia demands sanctions be lifted to sell oil in exchange for a cease fire. Then Iran agrees to a nuclear deal in exchange for them to sell oil? All that oil flooding the market will drop the price.
On the other side of the coin I see the price of gold going up at the same time as the market is going up.
This tells me some investors aren’t convinced and still think that the economy is going to get worse so buying gold as insurance.
I’m watching my back and I think oil stocks are for short term trades, not long term holds.
I’m actually hoping for the market to drop. Never been a buyer of consumer stocks but when I start seeing solid companies yielding 4% or more and at multi year lows I’m ready in my old age to buy for both a dividend and possibly growth.
If Costco sheds another $100 bucks I am in lol.
“… Myself I am whistling as I walk down a dark street and wonder what would happen if Russia demands sanctions be lifted to sell oil in exchange for a cease fire. Then Iran agrees to a nuclear deal in exchange for them to sell oil? All that oil flooding the market will drop the price.”
Recession fears will greatly affect oil futures. Lifting sanctions not so much; it’s a global market and sanctions haven’t stopped oil from entering the it. There is an EU/G7 price cap ($60/bbl) that one could argue has lowered prices, but I’m skeptical that it does more than create cheats and arbitrage trades.
I got interested in investing in the stock market in 1967 during my senior year when my high school invited a stockbroker to the school to give a speech on investing. Was so interesting that I wanted to get involved. So, I went to downtown Pittsburgh where the brokage house was located and open a trading account. Things were different in those days, commissions on trades and placing them by phone or in person. Not knowing a dam thing about investing the person that sighed me up recommended I invest in this hot new car that AMC was coming out with called the Pacer. All I remember is that I declined.
Good thing you didn’t go for the Pacer.
Don’t think you could even find parts for them at the junkyard.