FIRESIDE CHARTS
Real Rates, Crack Spreads, Unemployment
Interest rates hit new highs mid-week, bringing the 10-Year U.S. Treasury Yield back to its long-term average for the first time since 2007. Interest rates are now well in excess of trailing inflation…
Fed Forward Guidance, Earnings Estimates, Government Shutdowns
The Federal Open Market Committee (FOMC) left short-term interest rates unchanged, but their forward guidance spooked the markets. The committee also updated their economic projections to reflect the…
Consumer Prices, Oil, the Magnificent Seven
Rising energy prices pushed the Consumer Price Index (CPI) to its largest monthly change in over a year but, below the surface, the increase in core CPI remained subdued. The price of oil is now at…
The Labor Market, Operating Margins, Excess Savings
Job growth continued in August, but the unemployment rate unexpectedly ticked up as the labor force increased. Employment remains strong, but the gains are slowing and new entrants to the labor force…
The “Long and Lagged” effects of Interest Rates: Corporate Interest Rate “Lock-in”
For the past few quarters, our positive firm view on the homebuilding sector has been in large part due to the idea of “interest rate lock-in” for existing homebuyers. Put simply, homeowner’s existing mortgages…
The Economy, Business Investment, Consumer Spending
Inflation continues its downward trajectory, and economic growth may be accelerating. Accelerating growth may keep interest rates higher despite lower inflation. While this may create a confusing…
Consumer Headwinds, China, Artificial Intelligence
Sentiment on the strength of the U.S. economy has improved dramatically over the past couple of months, but there may be headwinds on the horizon for U.S. consumers. Lenders are tightening credit…
Interest Rates, Profit Margins, New Home Prices
The Federal Reserve raised interest rates, bringing the upper bound of their target rate range to 5.50%. This is widely expected to be the final rate hike, but in his press conference Chair Powell…
BCM 2Q23 Market Commentary: Will economic fundamentals support the new wave of optimism?
The prospect of an AI-fueled investment cycle as well as strong May jobs numbers propelled the market higher in Q2. Although we believe that many companies have already re-calibrated for a changing economic…
Economic Optimism, Mortgage Rates, U.S. Dollar
The Consumer Price Index (CPI) rose less than expected in June, bolstering optimism that inflation is behind us. Despite the positive inflation data, the market believes the Federal Reserve is locked…