M2 rebounded in the most recent money supply figures released by the Federal Reserve.
The preliminary January 31st measure stood at $8.868 trillion. Annualized M2 growth over the past 13 weeks was 4.9% vs. annualized growth of 5.1% and 3.7% for the past 26 and 52 weeks. While the strong surge in M2 first noted last fall has eased somewhat, M2 growth continues to trend in a direction that suggests inflationary risks are increasing. Prices on U.S. Treasury bonds have begun to reflect those inflationary fears as yield on the 30-Year are now over 4 3/4%. Rates on 30-year fixed mortgages have also risen sharply this week and have now surpassed 5%.
Showing posts with label money supply. Show all posts
Showing posts with label money supply. Show all posts
Friday, February 11, 2011
Thursday, February 3, 2011
Tonight's Money Supply Report
M2 contracted slightly in the most recent money supply report released by the Federal Reserve tonight.
The preliminary January 24th measure stood at $8.828 trillion. Annualized M2 growth over the past 13 weeks was 5.0% vs. annualized growth of 5.1% and 3.6% for the past 26 and 52 weeks.
Treasury bonds this week have performed horribly. And at the close this evening, the yield on the 30-Year was up to 4.66%, it's highest close since April of last year. I expect bond yields to continue to rise through the year, and for bond prices to continue to decline. Given recent price action, Treasury Bonds are not as attractive as a short candidate as they had been in September and October. At this juncture, I would not add any new short positions in Treasury bonds. However, I would still avoid purchasing them in this monetary environment.
The preliminary January 24th measure stood at $8.828 trillion. Annualized M2 growth over the past 13 weeks was 5.0% vs. annualized growth of 5.1% and 3.6% for the past 26 and 52 weeks.
Treasury bonds this week have performed horribly. And at the close this evening, the yield on the 30-Year was up to 4.66%, it's highest close since April of last year. I expect bond yields to continue to rise through the year, and for bond prices to continue to decline. Given recent price action, Treasury Bonds are not as attractive as a short candidate as they had been in September and October. At this juncture, I would not add any new short positions in Treasury bonds. However, I would still avoid purchasing them in this monetary environment.
Thursday, January 27, 2011
Tonight's Money Supply Report
M2 growth is back on track, with a decent surge in this most recent report.
The preliminary January 17th measure stood at $8.862 trillion. Annualized M2 growth over the past 13 weeks was 5.2% vs. annualized growth of 5.1% and 3.5% for the past 26 and 52 weeks.
As mentioned last week, the Federal Reserve has fine-tuned the formula they use for arriving at their seasonally-adjusted number for M2. This renders comparables for the 13-week and 26-week periods difficult. However, what has been slowly climbing, which is unaffected by the seasonally-adjusted calculations, has been the 52-week growth of M2. At the end of October 2010, M2 growth over the past 52 weeks had been 3.0%. At the end of July 2010, M2 growth had only been 1.8% for the previous 52-week period.
It will be intriguing to see how long the Federal Reserve permits this surge in M2 to continue before they begin withdrawing some of their more stimulative measures to stabilize the economy. Treasuries have sold off significantly over the past three months. That sell-off could continue and accelerate without some reassurances from the Federal Reserve that they will not shirk their responsibility to fight future inflation.
The preliminary January 17th measure stood at $8.862 trillion. Annualized M2 growth over the past 13 weeks was 5.2% vs. annualized growth of 5.1% and 3.5% for the past 26 and 52 weeks.
As mentioned last week, the Federal Reserve has fine-tuned the formula they use for arriving at their seasonally-adjusted number for M2. This renders comparables for the 13-week and 26-week periods difficult. However, what has been slowly climbing, which is unaffected by the seasonally-adjusted calculations, has been the 52-week growth of M2. At the end of October 2010, M2 growth over the past 52 weeks had been 3.0%. At the end of July 2010, M2 growth had only been 1.8% for the previous 52-week period.
It will be intriguing to see how long the Federal Reserve permits this surge in M2 to continue before they begin withdrawing some of their more stimulative measures to stabilize the economy. Treasuries have sold off significantly over the past three months. That sell-off could continue and accelerate without some reassurances from the Federal Reserve that they will not shirk their responsibility to fight future inflation.
Thursday, January 20, 2011
Tonight's Money Supply Report
Tonight's money supply report comes with a revision in the factors the Federal Reserve takes into consideration when preparing a seasonally-adjusted number for M2. From tonight's report:
As a result, the current numbers being reported differ slightly from the numbers released in recent money supply reports. However, the week-to-week trends remain the same.
The preliminary January 10th measure stood at $8.815 trillion. Annualized M2 growth over the past 13 weeks was 5.3% vs. annualized growth of 5.1% and 3.4% for the past 26 and 52 weeks.
One result of the revisions to the methods used by the Federal Reserve to calculate seasonally-adjusted M2 is that money supply growth for the first half of 2010 was slightly higher with the newer approach, and money supply growth for the second half of 2010 was slightly lower. However, what remains intact despite these revised methods of M2 calculation is that the trend in M2 growth has accelerated.
It's still bad news for U.S. Treasuries.
The benchmark incorporates minor revisions to data reported in the weekly and quarterly deposit reports, and it takes account of deposit data from Call Reports for banks and thrift institutions that are not weekly or quarterly deposit reporters. These revisions to deposit data start in 2007. In addition, this release incorporates data from Call Reports on the amount of small-denomination time deposits held in individual retirement accounts (IRAs) and Keogh accounts; related revisions to deposit data start in 2005. The benchmark also incorporates revisions to data on retail and institutional money market mutual funds, including revisions to IRA and Keogh balances held at those funds. Revisions to data on money market mutual funds begin in 2001. This release also incorporates the receipt of historical information from other sources of data.
As a result, the current numbers being reported differ slightly from the numbers released in recent money supply reports. However, the week-to-week trends remain the same.
The preliminary January 10th measure stood at $8.815 trillion. Annualized M2 growth over the past 13 weeks was 5.3% vs. annualized growth of 5.1% and 3.4% for the past 26 and 52 weeks.
One result of the revisions to the methods used by the Federal Reserve to calculate seasonally-adjusted M2 is that money supply growth for the first half of 2010 was slightly higher with the newer approach, and money supply growth for the second half of 2010 was slightly lower. However, what remains intact despite these revised methods of M2 calculation is that the trend in M2 growth has accelerated.
It's still bad news for U.S. Treasuries.
Thursday, January 13, 2011
Tonight's Money Supply Report
The six-week trend in M2 growth was broken tonight as M2 contracted slightly for the figure reported as of January 3rd.
The preliminary January 3rd measure stood at $8.825 trillion. Annualized M2 growth over the past 13 weeks was 6.8% vs. annualized growth of 5.8% and 3.3% for the past 26 and 52 weeks.
The song remains the same: Avoid U.S. Treasuries at this time.
The preliminary January 3rd measure stood at $8.825 trillion. Annualized M2 growth over the past 13 weeks was 6.8% vs. annualized growth of 5.8% and 3.3% for the past 26 and 52 weeks.
The song remains the same: Avoid U.S. Treasuries at this time.
Thursday, January 6, 2011
Tonight's Money Supply Report
Make it six weeks in a row now. M2 continues to surge, which should come as no surprise to anyone following this blog.
The preliminary December 27th measure stood at $8.848 trillion. Annualized M2 growth over the past 13 weeks was 6.9% vs. annualized growth of 5.8% and 3.3% for the past 26 and 52 weeks.
At the risk of being redundant, stay away from U.S. Treasuries. I can not stress enough the risk that these securities pose to investors right now.
The preliminary December 27th measure stood at $8.848 trillion. Annualized M2 growth over the past 13 weeks was 6.9% vs. annualized growth of 5.8% and 3.3% for the past 26 and 52 weeks.
At the risk of being redundant, stay away from U.S. Treasuries. I can not stress enough the risk that these securities pose to investors right now.
Friday, December 31, 2010
Tonight's Money Supply Report
For the fifth week in a row, M2 has shown growth. And the rate of growth continues to accelerate.
The preliminary December 20th measure stood at $8.834 trillion. Annualized M2 growth over the past 13 weeks was 6.9% vs. annualized growth of 5.9% and 3.2% for the past 26 and 52 weeks.
These numbers are precisely what one would expect of an economy on the rebound. Treasury bonds rebounded slightly from their recent, sharp sell-off, but they continue to offer little value at current levels given the prospects for corporate earnings growth and, unfortunately, future inflation.
The preliminary December 20th measure stood at $8.834 trillion. Annualized M2 growth over the past 13 weeks was 6.9% vs. annualized growth of 5.9% and 3.2% for the past 26 and 52 weeks.
These numbers are precisely what one would expect of an economy on the rebound. Treasury bonds rebounded slightly from their recent, sharp sell-off, but they continue to offer little value at current levels given the prospects for corporate earnings growth and, unfortunately, future inflation.
Thursday, December 23, 2010
Tonight's Money Supply Report
Yet another bullish money supply report has been released by the Fed this evening.
The preliminary December 13th measure stood at $8.829 trillion. Annualized M2 growth over the past 13 weeks was 6.8% vs. annualized growth of 5.7% and 3.2% for the past 26 and 52 weeks. All figures are pointing to an acceleration of M2.
The easy money has already been made shorting Treasuries, although downside risk remains. These numbers also bolster my believe that GDP growth for 2011 will accelerate, taking corporate profitability along with it. With the S&P up 37% over the past six months, investors may give pause to driving that index to new heights. But the S&P remains fundamentally undervalued, given the prospects for year-ahead earnings growth.
The preliminary December 13th measure stood at $8.829 trillion. Annualized M2 growth over the past 13 weeks was 6.8% vs. annualized growth of 5.7% and 3.2% for the past 26 and 52 weeks. All figures are pointing to an acceleration of M2.
The easy money has already been made shorting Treasuries, although downside risk remains. These numbers also bolster my believe that GDP growth for 2011 will accelerate, taking corporate profitability along with it. With the S&P up 37% over the past six months, investors may give pause to driving that index to new heights. But the S&P remains fundamentally undervalued, given the prospects for year-ahead earnings growth.
Thursday, December 16, 2010
Tonight's Money Supply Report
No surprises here. For another week, M2 showed incremental gains week over week.
The preliminary December 6th measure stood at $8.813 trillion. Annualized M2 growth over the past 13 weeks was 6.7% vs. annualized growth of 5.56% and 3.1% for the past 26 and 52 weeks.
The sell-off in bonds this week has been fairly spectacular. Therefore, I would not recommend anyone take new, short positions against the 30-Year Treasury Bond. I've closed out most of my own short positions against this security and would urge anyone else who's been short the past several months to consider locking in profits.
However, even at these prices, I would still recommend that investors avoid longer maturity Treasuries at this time.
The preliminary December 6th measure stood at $8.813 trillion. Annualized M2 growth over the past 13 weeks was 6.7% vs. annualized growth of 5.56% and 3.1% for the past 26 and 52 weeks.
The sell-off in bonds this week has been fairly spectacular. Therefore, I would not recommend anyone take new, short positions against the 30-Year Treasury Bond. I've closed out most of my own short positions against this security and would urge anyone else who's been short the past several months to consider locking in profits.
However, even at these prices, I would still recommend that investors avoid longer maturity Treasuries at this time.
Thursday, December 9, 2010
Tonight's Money Supply Report
M2 continues to accelerate in the most recent money supply report released by the Federal Reserve tonight.
The preliminary November 29th measure stood at $8.812 trillion. Annualized M2 growth over the past 13 weeks was 6.6% vs. annualized growth of 5.5% and 3.1% for the past 26 and 52 weeks. This numbers shows a slight acceleration against last week's money supply report, but weekly fluctuations are typical.
However, the numbers do seem to suggest that the Fed's efforts to reflate are succeeding. Hopefully the current round of quantitative easing efforts will be reconsidered or abandoned altogether.
The preliminary November 29th measure stood at $8.812 trillion. Annualized M2 growth over the past 13 weeks was 6.6% vs. annualized growth of 5.5% and 3.1% for the past 26 and 52 weeks. This numbers shows a slight acceleration against last week's money supply report, but weekly fluctuations are typical.
However, the numbers do seem to suggest that the Fed's efforts to reflate are succeeding. Hopefully the current round of quantitative easing efforts will be reconsidered or abandoned altogether.
Thursday, December 2, 2010
Tonight's Money Supply Report
M2 continues to accelerate in the most recent money supply report released by the Federal Reserve tonight.
The preliminary November 22nd measure stood at $8.809 trillion. Annualized M2 growth over the past 13 weeks was 6.4% vs. annualized growth of 5.3% and 3.1% for the past 26 and 52 weeks.
As a leading economic indicator, these numbers bode well for GDP growth (and corporate profitability growth) into the near-term future. However, these numbers are not good news for bond investors. The 30-year Treasury Bond has already fallen 6% from its October highs. Worse losses await if this trend in money supply growth continues.
At this time, most investors should avoid Treasury bond purchases and speculative investors may want to consider a short position in these securities.
The preliminary November 22nd measure stood at $8.809 trillion. Annualized M2 growth over the past 13 weeks was 6.4% vs. annualized growth of 5.3% and 3.1% for the past 26 and 52 weeks.
As a leading economic indicator, these numbers bode well for GDP growth (and corporate profitability growth) into the near-term future. However, these numbers are not good news for bond investors. The 30-year Treasury Bond has already fallen 6% from its October highs. Worse losses await if this trend in money supply growth continues.
At this time, most investors should avoid Treasury bond purchases and speculative investors may want to consider a short position in these securities.
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