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Back in 2021, the Fed turned to what had previously been an almost-never used tool, the Reverse Repurchase Agreement (RRP).  This is a variation on the longstanding tool known as a Repurchase Agreement.  In a RRP, the Fed "sells" some of its Treasury debt to a bank, with an agreement to buy it back later for an agreed upon price.  As collateral for the transaction, the bank pledges some of its more conventional loan book assets.  Such a transaction therefore ties up those bank assets, making... Read More

Some recent data on trucking shipments in the U.S. serves as bad news for stock prices.  The folks at Cass Information Systems keep track of how much stuff is getting shipped by truck in the U.S., and how much the shippers are having to pay for that. Most of the time their data on shipments and expenditures move together, but there are slight differences which can be informative.

And more important for my purposes, both sets of data show an interesting relationship to stock prices.  This... Read More

Every US president and Treasury secretary claims to favor a strong dollar, although they usually secretly wish for a weaker dollar, to make US exports more attractive.  But I am betting none of them have ever been aware of the relationship between taxes and the dollar, shown in this week's chart. 

What this chart shows is the US Dollar Index, a basket of multiple world currencies' values versus the dollar, which is dominated by the euro.  Most of you are already familiar with that.  The... Read More

Quietness in the stock market is a sign of a topping condition for prices.  This phenomenon works this way because after an uptrend, people feel more confident, everyone is feeling fine, there are no perceived problems, and no need to get aggressive or ambitious with one’s trading.  So price and breadth data show that quietness.  But after a decline, people get more panicky, and that shows up with louder breadth numbers.  

This week's chart shows an indicator which is a derivative of the... Read More

I wrote here back in November 2024 about the seemingly silly correlation between rainfall in New York City and the behavior of stock prices.  It does seem like a silly correlation, but it is also an amazing one which has been "working" for decades.  After a while, if something keeps working, then I try hard to get over my preconceived notions about whether it is a correlation which is appropriate to exist.

This week I want to take that same analysis in a related direction, comparing New... Read More

Four weeks ago, I wrote here about how the 2-year T-Note yield is saying that the FOMC ought to cut rates at the July 30 meeting.  They did not listen then, and now the message from the 2-year yield is even more emphatic.  The FOMC could cut its Fed Funds target by a half point (i.e. 2 quarter point cuts at the same time) and they would still be higher than what the 2-year yield says they should be doing.  The 2-year T-Note yield seems to know better than the Fed's 400 PhD economists what the... Read More

Most of the time analysts speak of the stock market getting overvalued in relation to earnings, dividends, book value, or some other "fundamental" factor.  This week's chart looks at that question in a different way, comparing the current level of the SP500 to M2, as a measure of how much total "money" there actually is. M2 counts how much real currency exists (dollar bills), plus it includes things like checking account levels, money market funds, and other things which are fascinating to... Read More

News on tariff exemptions for certain tech companies helped lift the Nasdaq 100 Index (NDX) to a new all-time high on Aug. 7, 2025.  That index is currently 11% above its own 100-day simple moving average, which is pretty far up there. 

But this is happening with only some of the component stocks pulling their weight.  Apple, Microsoft, and Nvidia are doing fine, but this week's chart shows that a declining number of NDX component stocks are above their own 100-day MAs.  That number peaked... Read More