Matthew Kerkhoff's Contributions

Many of us in the US have been swept up by what’s come to be known as the “Trump Rally.” The guise for this massive rise in stock prices over the past few months has been the promise of business-friendly tax reform, deregulation...

Markets are reacting to Friday’s abandonment of the GOP health care plan, and so far the narrative is one of uncertainty regarding the high expectations that have been set over recent months. The new health care bill was seen as the...

All attention is once again on Janet Yellen and the Federal Reserve this week, as the FOMC meets to determine whether an interest rate hike is warranted. At this point, with Fed Funds futures prices pointing toward a 95% chance of a rate hike...

This post-election stock market rally has been exciting and profitable, but it has also become long in the tooth. After going nowhere for almost two years, the Industrials shot from 18,000 to 19,000 in about a two-week period, took out...

After years of fighting against the forces of deflation, many areas of the world, including the US, are experiencing a rebound in inflation and growth prospects. The promise of rising prices and accelerating economic growth are causing asset...

When the cost of money changes, everything changes. Interest rates affect every aspect of the financial universe. At the global level, they impact currency and trade flows between nations. At the national level, they affect the discounted...

Spend enough time listening to the financial news or reading economic reports, and you’re bound to come across the topic of productivity growth. This concept, which can be easy to gloss over, plays a critical role in each one of...

This year promises to be unlike any other. Yes, I say that every year … but this time change really does seem to be upon us. As we kick off the new year, let’s take a step back and look at the broad themes of last year that are...

The monthly nonfarm payrolls report (aka. the “jobs report”) is one of the most important economic reports investors follow each month. Seen as both an important gauge of the economy’s momentum, and a major driver of Fed policy...

Part of the essence of Dow Theory has to do with confirmations, which at their root level look for congruencies in the marketplace. With many indicators frequently moving in different directions, alignments across key market barometers...

Do you have sweaty palms? Heart palpitations? Recent trouble sleeping at night? If so, you’re not alone. This has been one of the most divisive campaigns ever, and many people are reporting elevated levels of stress.

Low interest rates have been the bane of savers, retirees, pensioners and many others for a number of years now. With interest rates on the verge of rising, these folks are starting to breathe a sigh of relief.

Over the past five quarters, corporate profits have been shrinking, but the stock market remains near all-time highs. This divergence can’t persist forever, and will eventually break one way or the other.

Looking at Fed Fund futures prices, it’s evident that the market is pricing in a rate hike for December. You can see this in the chart below, which shows nearly 70% of market participants expecting the Fed Funds rate to be 25 – 50 basis points higher following that meeting.

Over the last decade, “Don’t fight the Fed” has become an increasingly important mantra and a very profitable one. After raising rates 17 times between 2004 - 2006, the Fed entered easing mode and has remained there ever since.

In the world of uncharted monetary policy, Japan has become the leader in exotic policies. They’re further along the easing curve than anyone else and represent a live case study on the limits of central bank intervention.

Groupthink can be a dangerous phenomenon in the financial markets, but it can also provide an advantage in some circumstances. If we know what key price levels other traders are watching, and how they’re likely to react if and when those levels are reached, then we can plan accordingly.