OPEN Net Positions – The Stubbornness of Low Volatility In this Net Positions, Ben Breitholtz discusses the stubbornness of low volatility. Comment Volatility will likely only erupt when growth trends shift or unexpected events rattle markets. Until then, we will continue seeing articles concerned about leverage by quants, portfolio insurance, and more.
The Financial Times – Departures signal a changing of the guard in HFT Quantlab’s Smith is looking for ‘fun’ elsewhere and he is not the only one With market volatility at historic lows and ever rising IT and data costs, the situation is a far cry from the boom years of 2008 and 2009, when slow… Continue reading Strong Connection Between Implied Volatility Synonymous with Fed on Hold
Financial Times – Saudi Arabia and Russia stuck in unlikely oil alliance Both countries have much at stake. Saudi Arabia is pushing through a radical transformation of its economy and the initial public offering of its state energy giant Saudi Aramco, using higher oil revenues today to pave the way — politically and financially — for… Continue reading An Uneasy Alliance
Wall Street Journal – Why Banks Haven’t Been Burned by Retail’s Meltdown Commercial loans to retailers are larger than energy exposure at many banks. Retailers represent Bank of America Corp.’s BAC -0.04% third-biggest industry exposure in its commercial-lending book, for instance, and the bank extended $41.6 billion to the sector at the end of 2016. By… Continue reading Avoiding the Retail Woes
View PDF The Wall Street Journal – The Surprising Source of U.S. Profit Growth Government data shows a big jump in profits from overseas, in contrast to sluggish U.S. growth Companies say profits are doing great. U.S. government bean counters have a more dour take. The differences in those two assessments reflect an environment where… Continue reading An Earnings Update
The Financial Times – Gavyn Davies: The Fed’s lowflation dilemma A few months ago, the Federal Reserve seemed determined, at long last, to normalise monetary policy in the US. In fact, it still seems to be set on that course. The FOMC has indicated that it intends to raise rates in June by a further… Continue reading More On The Fed and Inflation
Bloomberg.com – Charles Lieberman: Stocks Rally as Washington Burns and That’s Not Odd Investors are aware of the political news, but know that it matters only to the extent it undermines growth. Washington lawmakers appear trapped in gridlock, while the Trump administration suffers from daily political crises that threaten its legitimacy and weaken any hope for… Continue reading Washington And The Markets
The Financial Times – Talk of early Italian election hits Milan equities Wider stocks caught between US record and volatile oil A sharp fall on Italy’s main equities index is standing out, as talk of early elections in the country unnerves investors. The country’s former prime minister and leader of the Democratic Party, Matteo Renzi,… Continue reading Italian Election Coming?
Bloomberg.com – Draghi’s Riddle of Missing Inflation Argues for ECB Patience ECB president has quarterly hearing at European Parliament Recovery is strengthening but with little inflation in sight When Mario Draghi is asked on Monday why the European Central Bank can’t yet signal tightening for the region’s resurgent economy, he can respond with a question of… Continue reading Draghi Speaks
CNBC – The disappointing US economy keeps coming up short * The Citi Economic Surprise Index is at its lowest level in 15 months. * While GDP growth for the first quarter was revised higher, doubts remain about the rest of the year. * President Donald Trump’s promised growth of at least 3 percent looks hard… Continue reading Citi Surprise Index Slumps
The Wall Street Journal – Fed Officials Likely to Raise Rates in June, Finalize Plans to Reduce Portfolio Looming fight over debt limit has some officials considering a delay of the third rate increase until after September, or start to wind-down the balance sheet sooner Federal Reserve officials are likely to raise short-term interest rates at… Continue reading June Rate Hike
The Wall Street Journal – Credit Scores Hit Record High as Recession Wounds Heal More than six million U.S. adults will have personal bankruptcies disappear over the next five years, according to a recent report Credit scores for U.S. consumers reached a record high this spring while the share of Americans deemed to be some of… Continue reading Credit Scores