Category: INO.com Contributors

Yield Curve Inverts Deeper Than August Of 2019

Posted on by Gary Tanashian

Like the larger media, this tiny little spec within the media reports the news to you. The 10yr-2yr yield curve has inverted (ref. Yield Curve inversion upcoming). Now, what does it mean?

Well, the first thing it usually means is not to panic (especially now that High Yield credit spreads are easing), but to tune out the media hype about it because it is not the inversion that tends to signal an economic bust but instead, the steepening that follows it. Among the important questions are how long will it remain inverted and how deep will the inversion go before the next steepener?

Here is today’s post-payrolls (+431k jobs) move as the bond market demands that the Fed get off its ample behind and get with the inflation making nasty headlines as it cost-pushes across the economy while the Fed and the long end of the curve lag well behind. But the Fed is probably lagging for a reason and one major reason could be that they see the curve, they know what comes next and it’s not pretty.

yield curve
cnbc.com

From the post linked at the top: Continue reading "Yield Curve Inverts Deeper Than August Of 2019" →

Jobs Report Supports Aggressive Rate Hikes

Posted on by The INO.com Team

The most recent jobs report supports aggressive Fed rate hikes, to reduce inflation, but other factors need to be resolved to solve the big global picture.

The Bureau of Labor Statistics released some welcome news today. 431,000 Americans became gainfully employed in March, and the jobless rate was within 0.1% of 3.5%, coming in at 3.6%. Economists polled had forecasted that over 500,000 jobs would be added. However, that has little relevance with today’s report indicating that the labor market in the United States is vibrant and strong. The strength of today’s report shows that America’s workforce is now only 1.6 million jobs, or 1% of the levels that existed before the pandemic. It must be noted that higher employment is a byproduct of a tight labor market that has had to offer higher wages to attract new workers.

This solid report will give the Federal Reserve the necessary data to continue to raise rates, most likely at a much more aggressive rate. However, the Federal Reserve will have a near-impossible mission to have a soft landing as they reduce the current inflation rate to an acceptable target rate which has been 2%. Continue reading "Jobs Report Supports Aggressive Rate Hikes" →

Potential Market Inflection Point Imminent?

Posted on by Noah Kiedrowski

Cautiously Optimistic

Commodity prices are soaring, the war between Russia and Ukraine is worsening, inflation is raging, and the Federal Reserve has begun increasing rates. The backdrop seems ominous; however, the market may be just one positive headline away from an inflection point to turn the tide in a positive direction.

Timing the market has been proven time and time again to be nearly impossible; however, what is possible is capitalizing during these correction periods and buying heavily discounted stocks. These correction periods are great opportunities for long-term investors via dollar cost averaging throughout these long stretches of suppressed conditions. As the best market days typically follow the worst market days, building stock positions and riding out the volatility has proven advantageous. Missing out on just a few of the best-performing days of the market in any given year can drastically alter investor returns and yield dramatically inferior results.

The Russian/Ukraine War

Conditions between Russia and Ukraine continue to worsen while the west slaps sanction after sanction on Russia for its aggression. However, per Bank of America, stock declines related to the conflict may have bottomed. Continue reading "Potential Market Inflection Point Imminent?" →

The World Is Not Ready To Go Green

Posted on by Tim Snyder

“The following is an excerpt from Tim Snyder’s “Weekly Quick Facts” newsletter. Tim is an accomplished economist with a deep understanding of applied economics in energy. We encourage you to visit Matador Economics and learn more about Tim. While there, you can sign up for his completely free Daily Energy Briefs and Weekly Quick Facts newsletters.”

A little clarity helps keep the truth intact!

On Monday, March 21, 2022, in an address to the Business Roundtable’s CEO Quarterly Meeting, President Biden made these comments, “Things are shifting. We’re going to - there’s going to be a “New World Order” out there, and we’ve got to unite the rest of the free world in doing it.”

It’s dangerous to try and speculate as to what he meant, but in retrospect, the comments were made against the backdrop of the Invasion of Ukraine by Vladimir Putin.

Was Biden boasting to his corporate supporters like GM, Apple, and Amazon and passing on some little glimpse of what he believes is about to come with Russia and maybe China?

Or was Biden sending a signal to NATO that when the initial Russian invasion is over, he believes Ukraine will fall quickly and new alliances will develop? Some nations will find themselves pitted against former NATO partners and committed to the Russians because of their vast energy resources? Probably both Continue reading "The World Is Not Ready To Go Green" →

Bitcoin To Hit $100K!

Posted on by Wayne Burritt

I probably don't have to tell you that no matter where you turn these days, everybody and their brother has a new prediction for where the price of Bitcoin (BTC) is headed this year.

In February, I let you in on the nitty-gritty behind investment banking behemoth Goldman Sachs' prediction that Bitcoin was headed to $100K over the next five years. They came up with that number by comparing the market cap of BTC to the market cap of gold. But when we fit our own numbers to their logic and applied a similar calculus, our valuation was even higher. In fact, we came up with a price target of $117K. And even at that, The Bitcoin market was only 1/5 the size of the gold market, still pretty conservative in my book.

Earlier this year, I did a frightening simple analysis of BTC and came up with a price target of $114K. And when I mean simple, I mean simple: I just found the change between the low and high of BTC during 2021. I then applied that change to the opening price of BTC for the year and came up with $114K. We also found that even if the crypto market as a whole, of which BTC is the biggest driver, were to double in 2022, it would still be just 1/10th the size of U.S. stocks. And when you think about it, that calculus is not off the charts by any means.

The Woz Says Bitcoin Will Reach $100K

Now, Apple co-founder Steve Wozniak has thrown his BTC prediction hat into the ring: Continue reading "Bitcoin To Hit $100K!" →