US Economy

Cross-posted from Sober Look.

The S&P500 managed its first ever close above 1900 on Friday night: As a quick aside, I don’t know how anyone can look at this chart and not marvel at the recurrent bubbles that have defined our era in finance!

By Peter Schiff, cross-posted from Euro Pacific Capital: In this week’s release of the minutes from its April 29-30 meeting, Federal Reserve policymakers made clear that they see little chance of inflation moving past their 2% target for years to come.

From the overnight Fed minutes: In a joint session of the Federal Open Market Committee (FOMC) and the Board of Governors of the Federal Reserve System, meeting participants discussed issues associated with the eventual normalization of the stance and conduct of monetary policy.

Cross-posted from Sober Look. It remains difficult to reconcile treasuries trading at the same yields we saw during the US government shutdown (see post) with broadly stronger economic conditions in the US.

It was night of more reasonable US data but whatever it is right now the results are the same: a bond stampede!

Last night saw some decent US data. The NFIB small business optimism index hit anew post-GFC high, though is clearly still sucks (charts from Calculated Risk): April’s Small Business Optimism Index rose 1.8 points to a post-recession high of 95.2.

Here’s the Janet Yellen’s overnight Capitol testimony in full with a few highlights in bold.

Fresh from Westpac’s Elliot Clarke: Friday’s employment report certainly got the market’s attention.

Fresh from Elliot Clarke at Westpac: Hindsight reveals many interesting nuances often hidden in real time by pre-conceived perceptions and omitted information.

Australia’s hopes of a falling dollar on US tightening look weaker again today.

The basic assumption in Australian monetary policy right now is that the US recovery will push up interest rates in the medium term and that will, in turn, close the yield spread between Australian assets and those in the US, dragging down the Australian dollar.

Last night the US saw some mediocre data but it was overshadowed by Janet Yellen and the return of uber-dovishess.

  Last night’s market action saw a decent bounce in stocks with the S&P up 12 points.

The US economy is finally thawing out. Retail sales for March were out last night rebounded strongly. February was rounded up too (all charts from Calculated Risk): The U.S.

From Goldman: Little help from macro trends in Q1 After multiple twists and turns in Q1, the US, European and EM equity markets have delivered outcomes only a short distance from flat.

From Citi: Earnings guidance traditionally has been a critical factor in stock price trend, but that has not been the case for at least nine months.

Stocks soared last night on decent data and Janet Yellen doving up everyone’s glasses.

Good news here for the Glenn Greenspan boom and bust agenda.

More excellent work from Westpac’s Elliott Clarke today: A cursory look at the performance of the US stock market would indicate that the Federal Reserve’s efforts to right the US economy have been a storming success.

From the SMH and my favourite strategist, Jeremy Grantham: Legendary investor Jeremy Grantham says the US Federal Reserve is killing the recovery of the world’s biggest economy and the ”next bust will be unlike any other”.

By Peter Schiff, cross-posted from Euro-Pacific Capital The red flags contained in the national and global headlines that have come out thus far in 2014 should have spooked investors and economic forecasters.

The S&P rallied 11 points last night as we saw the first real sign of Spring thaw in US data. The Empire State manufacturing index bounced in March: The survey’s broadest measure of manufacturing conditions, the diffusion index ofcurrent activity, increased from a reading of ‐6.3 in February to 9.0 this month, nearing its reading in January (see Chart).

From the FOMC overnight: $10 billion taper, weather to blame for slowing, the forward guidance for employment for 6.5% unemployment rate tightening trigger was dropped but forecast employment gains were raised and so was the expected cash rate to 1 percent at the end of 2015 and 2.25 percent by the end of 2016.