CNBC – Michael Pento: This market indicator has predicted the past 7 recessions. Here’s where it may be headed next An inverted yield curve, which has correctly predicted the last seven recessions going back to the late 1960’s, occurs when short-term interest rates yield more than longer-term rates. An inverted yield curve will lead… Continue reading Interpreting The Yield Curve
Bloomberg.com – Junk Bonds Couldn’t Care Less About Stock Market’s Alarm Bells Credit, stocks disagree about default risk in rare divergence Weak balance sheet aversion driving gains in equities: Soc Gen Amid rising interest rates and growing corporate leverage, investors have cast aside debt-riddled companies in favor of cash-rich businesses, which include the FAANG stocks —… Continue reading Junk Bonds
The Wall Street Journal – Venezuela Tries to Resell $5 Billion Bond at Deep Discount Chinese firm Haitong markets bonds to hedge funds Venezuela is attempting to resell at a deep discount $5 billion of bonds it originally issued in December through a Chinese brokerage as it struggles to squeeze through a tightening cash crunch, according… Continue reading Venezuelan Bonds
The Wall Street Journal – How Funds Are Beating This Market The main reason, however, has less to do with fund manager brilliance than with the time-honored strategy of piling into whatever is working. Active managers are strongly overweight the information technology and consumer discretionary sectors, according to Goldman. These two S&P 500 sectors are… Continue reading More On FAANMG
Bloomberg.com – Five Questions About the Fed’s $4.5 Trillion Balance Sheet What everyone wants to know about the Fed’s plan to trim bond holdings The Federal Reserve is getting ready to “normalize” the size of its $4.5 trillion balance sheet. A lot is at stake. Simply maintaining that over-sized stack of bonds makes the Fed a big… Continue reading Talking Fed Balance Sheet
Bloomberg.com – How China’s Biggest Bank Became Wall Street’s Go-To Shadow Lender ICBC emerges as a major U.S. dealer in government debt repos Loophole in post-crisis rules leads to ‘regulatory arbitrage’ By exploiting a loophole in rules intended to keep U.S. banks from getting “too big to fail,” the state-owned ICBC has become a go-to dealer… Continue reading China Taking Over Wall Street
Bloomberg.com – John Paulson Is Struggling to Hold On to Client Money Filings show client capital at $2 billion out of $10 billion At 2011 peak, half of Paulson’s $38 billion was outside money A decade after Paulson shot to fame betting on the collapse of the U.S. housing market, the hedge-fund mogul is struggling to… Continue reading Struggling High Profile Money Managers
Bloomberg.com – Banker Robert Jones Said to Be on Trump List for Fed Governor Jones is chair, CEO of Old National Bank in Evansville, Ind. Fed Board currently has three vacancies among its seven seats Robert G. Jones, the chairman of a bank in U.S. Vice President Mike Pence’s home state, is under White House consideration… Continue reading Who Will Trump Pick As Fed Governor? More Names
Bloomberg Gadfly – Stephen Gandel: Bad News Bears Throw in Towel Shiller and Grantham were prominent, persistent and vocal bears. And it’s particularly worrying, at least when it comes to the adage, because they are flipping when the market is again at a record high and surging. The S&P 500 closed within striking distance of 2,500 on… Continue reading Fully Invested Bears?
The Financial Times – Automated trading of commodity futures accelerating Use of algorithms is controversial as study finds rise in volumes of traffic The machines are taking over markets for energy, metals and food. Automated trading systems now account for half the volume in many commodity futures after proliferating over the past two years, a government… Continue reading Algos In Commodities
The Wall Street Journal – As Emerging-Market Currencies Soar, Central Banks Stick to the Sidelines Most emerging-market economies have kept growing this year, taking the heat off normally trigger-happy central banks The rush of funds has pushed some currencies to eye-watering levels. The Indian rupee was at its most expensive on record at the end… Continue reading Emerging Markets Heating Up, But Not Yet Overcooked