The Financial Times – Dollar hits lowest level since Trump election The DXY, which tracks the greenback against a basket of its peers, is down 0.3 per cent to 98.60, having earlier in the session hit 98.48, its weakest mark since November 11. At that time the DXY was surging, on its way to a… Continue reading The Dollar Now At Its Lowest Level Since The U.S. Election
Bloomberg Business – Goldman Builds China Financial-Stress Index and, Yes, It’s Risen With China’s leadership focused anew on curbing the economy’s leverage, Goldman Sachs Group Inc. analysts are rolling out a new gauge of stress in the country’s financial markets. With corporate bond sales being canceled, stocks sliding and government debt yields climbing in recent… Continue reading Measuring China’s Financial Stress
Bloomberg Business – U.S. Stats Officials Say Measurements of GDP, Inflation Are Off Economists for years have questioned whether statistical agencies are keeping up with changes, resulting from an increasingly digitized and innovation-based economy, that improve the quality of goods and services. The answer: It’s hard, especially in technology and medical services where innovations can be… Continue reading Mismeasurement In Economic Stats
Investment Week – How can we explain the low volatility phenomenon? The distorting influence of the rise of smart-beta and risk premia strategies may be one of the reasons that the VIX index has fallen to current levels. Many of these strategies are centred on selling equity volatility futures and options to generate premium.… Continue reading The Last 15 Trading Days Have Been The Least Volatile In History
The Wall Street Journal – Can Trump Deliver 3% Growth? Stubborn Realities Stand in the Way A paper from four growth specialists published by the Brookings Institution in March takes a dimmer view. It maintains that almost the entire shortfall in output during the recent expansion reflects long-term forces unrelated to the financial crisis and… Continue reading Obstacles That Stand In The Way Of 3% Annual Economic Growth
Bloomberg Business – Wall Street Thinks Trump’s All Talk When It Comes to Breaking Up Banks ‘21st century’ Glass-Steagall may not be what it sounds like Instead of cowering, Wall Street executives and lobbyists are crowing, getting more confident about ditching rules that have annoyed them for years. That’s because the Trump administration is appointing friendly… Continue reading Wall Street Doesn’t Believe Trump Will Break Up The Banks
The Financial Times – Junk bonds’ risk-return profile has been permanently damaged Upside potential hit by call protection erosion and a drop-off in recovery rates Many of the companies that survived would not have done so in any previous cycle. Covenant protection of existing bonds would have precluded the pledging of assets that had already been… Continue reading Junk Bonds
DealB%k (NYT Blog) – Hedge Fund Managers Don’t Always Beat the Market, but They Still Make Billions Good performance, mediocre results or even downright ugly returns. When it comes to hedge funds, it scarcely matters. Even as some investors begin to sour on these high-priced stock pickers, the top fund managers still haul in enormous paychecks. The… Continue reading Hedge Fund Performance May Be Down But Manager Pay Remains Stable
Bloomberg – Mohammad El-Erian: Unusually Low Volatility Can Be Dangerous for Markets Excessive stability breeds instability down the road None of this would be particularly remarkable if the decline in volatility was not coinciding with notable fluidity in the global economy on account of economic, financial, geopolitical, institutional and political factors. From the North Korean nuclear… Continue reading Markets and Central Banks Not Seeing From the Same Perspective
Bloomberg – Oil Jumps as Saudis, Russia Favor Extending Output Deal to 2018 Ministers agree pact should extend through to end of March While output curbs that started Jan. 1 are working, global inventories aren’t yet at the level targeted by OPEC and its allies, Saudi Energy Minister Khalid Al-Falih said in Beijing alongside his Russian… Continue reading Russia, Saudis Extend Production Cuts
View PDF Comment Through Friday 455 (91%) of the S&P 500 companies have reported Q1 2017 earnings. The last few weeks we have noted that Q1 2017 earnings were coming in much better than previous quarters. The latest earnings reports through May 12 do nothing to change this story. As the chart below shows,… Continue reading An Earnings Update