TEK2day

Operating at the Intersection of Technology and the Capital Markets

    Tag: Stagflation Is Imminent

    • QT or QE?

      So much for the Fed trimming its Balance Sheet by $95 billion per month. The Fed has expanded its asset base during the month of August. Fed assets stood at $8.9 trillion as of Wednesday August 10th. It is difficult to allocate this Federal Reserve any credibility as it relates to mitigating price inflation or…

    • Inflation Reduction Act Ensures Stagflation

      If voted into law the Inflation Reduction Act will ensure more deficit spending, more Federal debt, more taxes, negligible Real GDP growth, low interest rates and high inflation – a recipe for continued Stagflation. What does stagflation look like? You are living it. The earmarks of stagflation are high inflation, high Federal debt and negligible…

    • The Fed Is Blinking

      It would seem to us that the Fed is stalling its QT effort. Inflation will not materially decline unless the Fed materially shrinks the money supply. Looking at the Fed’s balance sheet it appears the Fed has stalled its QT effort, especially when one considers that the Fed had planned to reach a $95 billion…

    • It’s No Longer Enough To Buy The Narrative

      We are getting closer to finding a bottom but are a long way off from capitulation across the equity markets. Equity Bottom: We believe a bottom will not be found before the Fed achieves its QT run rate of $95 billion per month which is likely to occur around Labor Day. Recession: We expect the…

    • More Economic & Earnings Weakness To Come

      If you missed the latest episode of our TEK2day Podcast, you may access it at the YouTube link below. Episode 443 covers Ad-driven and Consulting-focused business models from the perspective of how they fare when the macro-environment softens. Episode 443 is a follow-up to our recent TEK2day article: Get Ready for EPS Misses

    • Consumer Strength Is Waning

      The New York Fed released its quarterly report on Household Debt and Credit this past week. Consumer strength is waning, not gaining. Loan delinquencies and foreclosures are up across auto loans and mortgage debt which is primarily where debt expansion has occurred in prior months. There are a number of charts between pages 3-40 that…

    • Tough To Be A Fixed Income Investor

      It is tough to be a fixed income investor in this market. Yields are rising, but in real terms even high yield securities are in negative territory given the inflated CPI environment. Some fixed income portfolio managers are spinning that now is a great time to be a fixed income investor because high yield securities…

    • Treasury Yields Will Only Move In One Direction

      10-year Treasury yields sit around 2.72% and will climb higher as the Fed: a.) lifts the Fed Funds Rate and, b.) trims its balance sheet (i.e. quantitative tightening “QT”). There is no scenario in which the Fed executes QT only to have Treasury yields move lower. It is simply a question of supply and demand.…

    • Tech Earnings Season Is Here

      Technology company earnings season is in high gear. It is a heck of a time to be a Technology fund PM or Analyst. Despite the NASDAQ Composite being down 13% YTD, the group has another 40% downside or more in our view. Many of the high-multiple of revenue (no earnings) stocks have 80-90% downside as…

    • Google Search Trends: Stagflation

      The word “stagflation” is at peak interest at the moment as measured over the most recent 12-month period using Google Trends to calculate search interest. We have beat the drum on stagflation for the past year and some on Wall Street have picked up the baton in recent days. Below we have created a chart…