About 25 years ago a character debuted on Saturday Night Live and the recurring joke was to try and guess the character’s gender.
The sketches typically had red herrings and lots of mis-direction and the question of Pat’s gender was never answered.
Never a terribly popular character, someone had the fiscally irresponsible idea of making a feature film and Pat was never heard from again.
The guessing stopped.
Fast forward to 2016 and think of Pat as an FOMC member.
Over the past 2 months or so there has probably been lots of mis-direction coming from Federal Reserve Governors, perhaps as they floated trial balloons to see how interest rate action or inaction would be received by the stock market.
The health of the stock market is not really part of their mandate, but since so much of the nation’s wealth is very closely aligned with those markets, it may only be logical that the FOMC should at least have some passing interest in its health.
Who would have guessed 6 months ago when the first interest rate hike occurred that we would be at a point where that has thus far been the only one?
Who would have thought that in the transpiring 6 months nothing would have validated the December 2015 interest rate increase and that nothing but conflicting economic data would be forthcoming?
One thing that was fairly certain last week was that there wasn’t too much of a trend and there wasn’t any clear path to follow.
As markets began testing the 18000 level on the DJIA and 2100 on the S&P 500, the chorus was loud and clear.
There is no place to go but up.
The alternating chorus was that there was no place to go but down.
The market instead went sideways, but not very far as all roads seemed to be closed off.
After the previous week, which ended precisely unchanged, this past week managed to move 0.1%,
Granted, the first three days of the week did seem to benefit from Chairman Janet Yellen’s superb demonstration of how hedging your words works to allow people to hear whatever it is that they want to hear.
Following Monday afternoon’s talk, Dr. Yellen essentially said something to the effect of “It’s not good out there, but it’s all good. You know what I mean?”
Years ago I heard a fairly odd individual present a lecture on the pharmacological management of children requiring sedation. He referred to the well known age and weight based rules regarding dosages, but said they were inadequate. Not surprisingly, after listening to him for a brief while, it was only his eponymous rule that could determine the correct amount of sedative agents to administer to a child.
While so many people are still confused over the “Transgender Bathroom” issue, the real confusion came from this week’s Employment Situation Report.
With the odds of an interest rate hike by the FOMC’s June meeting seemingly increasing every day, you would really have to believe that the FOMC knew what was going to be in the economic news cards.
The increasing hawkish talk all seemed to be preparing us for a rate hike in just 2 weeks. Judging by the previous week’s market performance you would certainly have been of the belief that traders were finally at personal peace with the certainty of that increase.
The concept of being at personal peace is confusing to some.
I’m personally confused as to how it could have taken so long to see the obvious, unless we’re talking about stocks, interest rates and investor’s reactions.
What I find ironic is that the proposal for all inclusive bathrooms is really age old, at least at the NYSE, when there was a recent time that there was only a need for a single sex bathroom, anyway.
Just like many of us know, what a great degree of certainty, which camp we belong to when nature beckons, the lines seemed to be increasingly drawn with regard to interest rates.