Will the Velocity of Money Finally Rise?

Posted by Capital Trading Group on Jul 12, 2018 4:23:57 PM

Last week we saw NFPayrolls rise 213k above the 195k that was widely expected.  May’s payroll report was also revised higher by some 21k to 244k. One weak spot was that the unemployment rate saw a .2% up tick to 4.0% and the average hourly earnings 

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Consumers Feeling the Pinch of Fed Rate Hikes.

Posted by Capital Trading Group on Jun 20, 2018 8:27:17 AM

 

The Federal Open Market Committee raised rates for the second time this year, raising the band to 1.75/2.00%. The FED has also upped its optimism for the growing economy forcing many to believe we will see 2 more 25bp hikes this year. We thought it was ironic that the WSJ had an article entitled “Consumers feel pinch as Fed tightens policy,” right next to the rate hike article. So, on one hand they are raising because of the growth, but on the other they are saying the consumer is feeling the effects. Now we know policy acts with a lag, but we would rather the FED admit that we live in a 2-tiered economy, one by which a very select few have benefited immensely, while the majority continue to be saddled with massive debt and debt associated costs. What is obvious to us is that the FED truly doesn’t care about the overall disparity as long as inflation grows just enough, to gradually de base the monetary base. Chair Powell even suggested that inflation above 2% wouldn’t be a worry at this point, yea no kidding, how else do we purge debt…but inflate it away.

 

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Interpreting Fed Speak & FOMC Projections, Crypto Craze and Repeal of Net Neutrality

Posted by Capital Trading Group on Dec 21, 2017 8:53:24 AM

Last week saw the final Fed meeting of 2017 and the final meeting with Janet Yellen as chair.  The FED raised rates another 25bp to put the top end of the Fed Funds range up to 1.5%. This move was widely expected and priced into the markets.  Here are the headlines:

  • FED SEES FASTER 2018 GROWTH
  • LABOR MARKET STAYING STRONG
  • MONTHLY BAL. SHEET RUNOFF TO RISE TO $20B IN JAN.
  • Median dot plot for 2020 rose to just over 3% for Fed Funds level
    (What policy makers think is coming in the future)

 

Yellen doesn’t feel that the equity markets are flashing any warning signs and doesn’t feel that the markets exhibit levels one would deem “frothy.”  Even though she didn’t use specific fundamentals or none at least that we can understand, it seems as if the FED simply views the upward move in the markets as “Job well done! Job well done alright, it only takes roughly $2 Trillion a year of increased global debt to keep this linear pig going, but who cares about debt, right? 

 

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Artificial Intelligence is Supplanting Humans

Posted by Capital Trading Group on Dec 13, 2017 11:59:16 AM

     What a week for Blockchain, that’s all we can say.  For all the hoopla circulating around the introduction of Bitcoin futures and all the endless blather of uncertainty, we feel that the CBOE futures came and went without a whimper.  The CBOE site was down for a bit, but overall the trading of Bitcoin futures, had zero effect on the overall Bitcoin price.  As we have stated for quite some time, Bitcoin should never be confused with any derivative, nor should any of our readers be confused about what we refer to as Bitcoin. 

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Something New And Profound Is Upon Us!

Posted by Capital Trading Group on Dec 7, 2017 10:47:43 AM

Last week was highlighted by the big hoopla about the big unveiling and roll out of the Trump tax plan. We can hardly stand the anticipation, speculation, Dems bipartisanship, yadda, yadda, yadda. The only real question is how much pork is Wall Street being served up and how far in debt does the country have to go to appease these corporate overlords. So they want the 20% rate or lower which we all know transcribes to a near sub 10% effective rate, really? Then there’s the issue of a pending government shutdown, which will no doubt-ably be averted last minute with a strong kick of the debt can down the road. Anyway the equity markets were whipsawed with the SP500 putting in a rarified 2% move in about an hours’ time on Friday. A rare increase in volatility, we are surprised the bots recovered. The NASDAQ market seems to have already started to roll over and seems to be having difficulty holding the 6400 level.

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