Author: Tim McPartland

Well I was waiting for the 1 piece of news that would light a fire under the ‘party’ and we got it.

Honestly I expected a party with a softer inflation number–but it is just 1 piece of data–in the big picture nothing to get carried away about, but as always we get overreactions and then pay a price later. But for now my portfolio is flying – so what the hell I am happy.

With the S&P500 up 4% right now and the 10 year treasury yield falling hard–down 29 basis points right now to 3.87% it will be an interesting day. Will gains hold? Or will early gains give way to some give back?

Now that elections are mostly behind us (except for a handful of races) we can move onto the worryings of the consumer price index (CPI).

Tomorrow we have the CPI announcement at 7:30 a.m. (central) and consensus is for a reading of 7.9% as compared to the last reading of 8.2%. The core rate is forecast at 6.5% versus the last reading of 6.6%. NOW is the time when the Fed is gathering ‘data’ for their December FOMC meeting—gathering info to either reduce the rate of increases in interest rates or keep it at 75 basis points. We have tomorrows CPI reading as well as the November reading of CPI and 1 additional employment report before the December meeting, which occurs on December 13 and 14.

Today we have no economic news of consequence–although there will be lots of chatter around the elections–but generally it could be a relatively quiet day in equities and the bond market.

I see Meta (Facebook) has announced 11,000 folks are being laid off–it has been a long time since I remember tech firms laying off large numbers of folks. Of course Twitter laid off half their folks last week (before trying to hire some back). Not certain this is meaningful to the overall economy, but certainly the layoffs are high profile.

Bitcoin is down to $17,xxx as there is turmoil of sorts with liquidity–I obviously don’t follow this closely as I would never own something like this–I still don’t understand block chain and don’t plan to take the time to try to understand it–I’ll leave it to the smarter people. But like many things one has to keep an eye on a trillion dollar asset (which was previously $3 trillion)because it is large enough to have consequences.

Another day and it is unlikely I will buy anything today–maybe Friday will be a nibble day. With low cash levels there is no use stepping further into the fray until after the CPI tomorrow.

Equities had quite the party yesterday with the S&P500 up almost 1%—which serves to keep some fire on the ‘bottom is in’ argument. I wish it was in, but I have no real idea–seems to me we need to see a lot more economic data before we know where we are going. Of course the ‘smart people’ are vying for bragging rights of who had the correct guess. This morning futures are just slightly positive.

The 10 year treasury yield crept 4 basis points higher to 4.20% which is exactly where it is at this morning. Daily movements up or down in rates of 3,4 or 5 basis points are not meaningful to markets–of course the big potential move is slated for Thursday with the release of the CPI.

Yesterday we didn’t have any real economic news items–same for today. Of course today we have elections, which could be seen by some as a economic news item. Just a tiny reminder that we don’t allow political discussion here–while I know it is important it is simply too divisive and interrupts civil discussion. Yesterday a few comments ‘touched’ on politics and I left them up, but hopefully we can get through today without incident.

I didn’t even open my accounts yesterday, but my google spreadsheet indicated I had a nice gain of around 1/2%. Today I doubt I will do anything at all–I am not looking to add new positions and my nibbles have simply added to current positions. I have maybe 60ish positions so most bases are covered—high yield bucket, safe bucket, term preferred bucket etc. and pure cash positions are low (5-10%). I will have more cash available continuously as I hold a gaggle of T bills with 3 month, 6 month, 9 month, 1 year and 2 year maturities–as well as utility bonds and Farm Credit bonds.

If you haven’t been glancing at the ‘Headlines of Interest‘ that I post each night (between 5 and 7) you should take a look. While certainly I can’t capture 100% of all pertinent headlines I do post many press releases that may stimulate ideas. After I post them I always go back and read 3-4 that caught my eye.