


Robert Lloyd, CFA
- Jun 16, 2022
The Swiss National Bank announces they will start selling stocks
Few are talking about the Swiss National Bank and why it is connected to today's stock market selloff. Switzerland's central bank unexpectedly raised interest rates today and announced they would be active in the foreign exchange market. Swiss central bank surprises markets with first rate hike since 2007 (cnbc.com) Translation: "All the stocks we bought for F/X purposes are going down and we want to lock in profits." The Swiss and Japanese banks have bought lots of stocks to



Robert Lloyd, CFA
- Jun 15, 2022
The long tail chase
In childhood games, sports and warfare, it is very difficult to catch somebody trying to run away from you. https://lnkd.in/gVfw5thT. Today we will hear the Fed's views on how they will fix inflation. Does that mean short term interest rates rise above inflation? That's what it took in the 1970s to stop inflation and implies 9+% short term interest rates to fix things. Have you thought about what this means for your portfolios and how to manage the transition? This next reces



Robert Lloyd, CFA
- Jun 13, 2022
The hope in May versus the reality of June
In May, we had an inflation reading called Core PCE (personal consumptions expenditure) that indicated a potential peak in inflation. Last week, another inflation reading on the headline CPI (consumer price index) was much worse than expected. Markets popped on the first, then melted on the second. In the world of finance, the REACTION to the data can sometimes be more important than the DATA REPORT itself. At 8.6%, last week's headline CPI was only a bit higher than the 8.3%


Robert Lloyd, CFA
- Jun 8, 2022
All eyes are on the US 10-year yield. Will the peak hold?
Last month on May 9th, the US 10-year yield peaked at 3.21%. This weakness in the bond market then backed off over the next few weeks, but today began nosing higher. With all the debt in our economy, higher rates slow growth as interest expense and cost of capital rise. The markets are wrestling with a conundrum: will interest rates of 3% slow economic growth enough to tame inflation or is the Fed's unwillingness to raise rates anywhere close to our 8% inflation feeding the i



Robert Lloyd, CFA
- Jun 8, 2022
Why won't the bond market reflect 8% inflation?
One reason is because the market thinks inflation will peak soon. We have another important inflation data point coming Friday, but it was the May 25th news on core personal consumption expenditures (Core PCE inflation) that helped stop the market decline. Core PCE indicates a possible peak and decline in this important data series (important because the Fed watches it closely). Inflation may fade as stimulus is withdrawn, interest rates rise, demand falls, and the economy sl