Author: Tim McPartland

The 10 year treasury is off 10 basis points or so today—trading as low as 3.58%. Overreaction to Powell’s speech yesterday? Who knows, but it is favorable to us.

Today in 45 minutes we have the PCE price index release–this could totally reverse yesterdays gains–not a prediction just a possibility. The index was 6.2% (year on year) last month. The core index was at 5.1% year over year with a forecast for 5.0%. So anything at forecast or slightly below would let the rally continue for a day or two more.

During the course of the day we have numerous reports being released as can be seen below. There are 2 Fed yakkers–after Powell yesterday they will not move markets.

Or course tomorrow we have employment numbers–very important to show a little softness to keep a 50 basis point rate hike going for December (although I think it is all but guaranteed now).

We end November today with a trio of Fed yakkers–they will, almost without, doubt move markets.

Today we have Fed speakers Cook and Bowman as well as Chair Powell at 12:30 p.m. (central) so we will see some spikes and dips in markets during the day–long term it doesn’t matter. No one will be dovish – it is just a matter of how hawkish they will sound.

To me, personally, we have more important news today than Fed speakers. We have the ‘jolts’ report so we will see how many job openings we have out there. We also have the ADP employment report at 7:15 (central). Chicago PMI and pending home sales are also on tap. Then we have the beige book release which will give us a recap of regional information from the various Federal Reserve banks.

Once again the futures markets are very quiet at 6 a.m. – S&P500 up 1/5%. The 10 year treasury yield is at 3.72%–just right again.

Today my plan is to buy some community/regional bank preferreds as I noted here. Next I will be looking over the portfolios to see what I can can sell to generate some investable cash–some positions are overweight and with my low cash position I will be forced to sell something if I see a ‘bargain’ appear. On the other hand maybe I won’t have to sell anything–depending on the timing of a ‘bargain’ purchase since I will have 3 month treasuries maturing in December–we’ll see.

Well winter is back in Minnesota – I was hoping for more global warming, but with 6″ of fresh snow on the ground we may not see the grass for 4 months or so. Worse than the snow is the cold and the wind–will be around zero today with the wind chill and I will be out looking at a house mid afternoon–ugh!! Actually I have plenty of weapons against the cold–I mean I have lived in Minnesota since 1985 –plenty of super warm coats, hats, gloves and boots. Only 2-3 days ago I saw folks walking around in t-shirts and shorts–that is how it works in Minnesota–when it is 40 or 45 degrees and sunny folks think summer is here and dress accordingly.

Almost every business day we have Fed speakers–you know the folks–the ones that had no idea that interest rates were too low a year ago and missed the obvious (which almost all of us knew). They are the ones that say they are ‘data dependent’, but yet every day shoot their mouths off about what they will do in a few months. Give me a break!! Are you data dependent or do you simply like to hear yourself talk?

Anyway Fed folks Bullard and Williams shot their mouths off yesterday–stocks tumbled but the bond market yawned. Almost without doubt these Fed officials are ‘pleased’ when stocks tumble – whatever. Eventually markets will turn a deaf ear to these clowns–see them as the buffoons they are. I think the bond markets have them figured out already–yawn.

I see the futures markets are up a bit–mostly meaningless of course. The 10 year treasury yield is at 3.65%–steady as we go–perfect.

So today we have some housing data and some consumer confidence numbers. No reason to think these pieces of data will move markets absent major (huge) surprises. I think markets are focused on PCE (personal consumption expenditures) on Thursday and employment on Friday.

I didn’t do a thing yesterday–no buying or selling–in fact I only checked my accounts at the end of the day to see the bottom line–very tiny amount of red–almost a rounding error. As I mentioned before I like the end of the month since that is when dividends and interest roll into my accounts–kind of a silly thing really since the amounts are not exactly life changing–BUT over time it is real money.

Yesterday I paid $2.34/gallon for gas for my SUV–felt like the olden days. Locally we have a bit of a ‘gas war’ raging with prices much below the Minnesota state average prices–regional giant operator Kwik Trip is putting the hammer to competition–capitalism at its finest for consumers (although long term maybe not). Minnesota has a law that puts a floor under retail gas prices so we don’t see gas wars often, but it sure feels good to fill up for $30 once again.

I see another crypto brokerage firm went bust yesterday. I understand zero about crypto–I simplistically equate it to precious metals, but I can hold my precious metals in my hand. The concept of digital coins is a bit far for me–BUT if bitcoin ever went to $1 I would buy some just because–because maybe a more foolish person would pay me $67,000 for it someday.