The Fed is Getting What It Wants in Financial Markets

Now it's the labor market's turn

Highlights

• What is nagging the Fed? It can’t be happy about this recent run-up in oil prices as well as high-profile wage settlements and sub-4% unemployment

• We are in overshoot mode in Treasuries, just as we were in the summer of 2007 — for me, that serves as a constant reminder to buy these price dips in bonds

• The reflexive market rally that began last October had momentum, technicals, sentiment and emotion, but it did not have fundamentals and valuations

• The S&P 500 is signaling a recession after enduring a 24-month span where the index is completely flat — foreshadowing a downturn 100% of the time since 1970