Bloomberg – Fed’s Cut in Its Big Bond Hoard Likely to Begin at Glacial Pace Officials uncertain about move’s impact on financial markets If you thought the Federal Reserve’s interest rate increases have been gradual, wait until you see what it has planned for its $4.5 trillion balance sheet. The central bank looks likely to… Continue reading Balance Sheet Reduction Likely Dictated by Inflation
Comment Renewed interest in leveraged ETFs reminded us of a related phenomenon we noticed among energy-related ETFs. Total assets of energy sector funds, or ETFs comprised of shares of energy firms, far outweigh those in commodity ETFs focused on oil and natural gas. Yet short-term speculation in ETFs is much more equally split… Continue reading Levered ETFs Unkind to Energy Bulls
The Wall Street Journal – Quadruple-Levered ETF? SEC Hits Pause on Its Approval of an Exotic Investment Commissioners’ review could reverse or uphold earlier decision by the SEC’s staff to approve the risky, new products The Securities and Exchange Commission will reconsider its initial approval of a risky, first-of-its-kind exchange-traded fund that promises four times the… Continue reading 4x ETFs Now In Doubt
Tim Duy’s Fed Watch – Can’t Keep A Good Economy Down Altogether incoming data adds up to some healthy growth expectations for the first quarter. The Atlanta Fed GDPNow tracker is looking for 4.1 percent growth in the second quarter. Still, I don’t think the US economy is really posting such numbers any more than… Continue reading U.S. Economic Growth Down-shifting to Average Growth Rates
Bloomberg.com – Harvard Endowment’s Biggest Public Holding Is a High-Yield ETF iShares iBoxx corporate bond fund valued at $841 million Endowment managers disclose first-quarter holding in filing The Harvard University endowment’s biggest publicly traded holding is a high-yield bond exchange-traded fund, a move into a cheap, passive investment as the school replaces some of its own… Continue reading How High Yield Is Being Bought
The Financial Times – Oil market rebalancing needs ‘much work’, says IEA Energy body warns Opec deal may not reduce stubbornly high stockpiles enough Drastic Opec-led production cuts have helped accelerate the oil price recovery but “much work remains” to drain the market of excess inventories, the International Energy Agency said on Tuesday. The deal… Continue reading Is OPEC Winning?
The Wall Street Journal – Highflying Emerging-Market Hedge Funds Fail to Impress Investors The problem? Investing in funds tracking common market indexes can generate returns that are as good, or better Hedge funds that invest in emerging markets are generating some of their best returns on record and growing their assets to all-time highs. The trouble… Continue reading Another Example of Passive Beating Active
Bloomberg Business – Bullish Dollar Bets Were the Most Crowded Trade. Not Anymore. The dollar has been knocked off its pedestal. Bullish bets on the U.S. currency have been toppled as the world’s most popular trade after five months of holding the top spot, according to a Bank of America Merrill Lynch survey of fund… Continue reading Speculators Continue To Lose Faith In The Dollar
Bloomberg.com – This S&P 500 Death Cross Could Be The Real Deal Technical signal highlighted for its ‘rarity and consequence.’ Not all “death crosses” are created equal. In a note to clients, Intermarket Strategy Ltd. Chief Executive and Strategist Ashraf Laidi points out that the S&P 500’s 50-week moving average is falling below its 100-week moving average. This “statistically… Continue reading When You’re Completely Out Of Ideas … The Death Cross!
Bloomberg View – Narayana Kocherlakota: The Fed Is Making a $2 Trillion Mistake Reducing its bond holdings will leave the economy vulnerable. In choosing a “neutral” position consistent with its goals of low unemployment and 2 percent inflation, the central bank has essentially two options: 1. A smaller balance sheet and relatively low interest rates; 2.… Continue reading Another Opinion On The Fed’s Balance Sheet
Bloomberg Business – Bond Math Tells One Analyst That Ultra-Long Treasuries Would Save the U.S. Money Average maturity of U.S. debt remains under six years A basic exercise in bond math shows that the government would likely save money by stretching its yield curve to the 50-year mark, said Abuaf, who heads the financial strategy group… Continue reading More On Ultra-Long Treasuries
Bloomberg.com – Rich Retirees Are Hoarding Cash Out of Fear While younger generations get poorer, older Americans can’t seem to spend it all. A new study finds many U.S. retirees keep saving even after they’ve retired. The average American over the age of 60 cuts spending 2.5 percent per year, or about 20 percent over a… Continue reading Retirees