Financial Times – Federal Reserve happy to walk into a run of interest rate rises The Fed did deliver another quarter-point interest rate increase, only the third in the cycle that started in December 2015. Yet investors who had begun to position themselves for a faster pace of rate increases were wrongfooted by officials electing to… Continue reading U.S. 10yr Total Returns During Tightening Campaigns
Comment The street has been quick to question the positive reaction to a less hawkish than expected Fed. But with early indicators of GDP slowing and the Fed seemingly content with the gradual pace of tightening, the stock market may be anticipating an earlier end to tightening than many commentators. The next series of charts… Continue reading S&P 500 Returns During Tightening Campaigns
Financial Times – EM stocks climb to 20-month high as Fed fears ease The benchmark MSCI Emerging Market index jumped more than 2.3 per cent on Thursday — its biggest one day gain since last July — to hit a 20-month high of 965.67. The gains were powered by a 1.6 per cent advance in Mexico’s… Continue reading Emerging Market Equities During Tightening Cycles
The Financial Times – Fed finds the plot as investors join the dots This may be one of the most happily received rate increases on record So it was that the Fed succeeded in cushioning Wednesday’s rate rise, almost exactly as it presumably desired, by the masterly inactive strategy of not changing its dots. As the… Continue reading Wait, Maybe the FOMC and Markets Do Agree?
The Wall Street Journal – ECB Walks Fine Line as It Prepares to Signal Possible End to Stimulus Even a slight change in message could rock markets and upset the eurozone’s recovery The European Central Bank is entering uncharted territory as it prepares to signal a possible retreat from its massive monetary stimulus without triggering a… Continue reading ECB Testing Hawkish Rhetoric
Bloomberg.com – ‘Anonymous’ Joins Hacker Army Targeting Central Banks for Cash Group shut down Greek Central Bank website last year Settlement systems, government agencies also being targeted “For a central bank the question is not if, but when, they will be victim of a cyber-attack,” said Giulio Coraggio, a lawyer focusing on cyber-security at DLA Piper… Continue reading Hack The Fed
The Financial Times – French election poll tracker It is the most closely watched French election in years – and the closest. After the UK chose Brexit and Donald Trump took the White House, France’s choice of its next president could bring more populist upheaval to global politics and decide the fate of the EU… Continue reading A French Election Update
Yahoo Finance – JPMorgan’s Dimon: Corporate cash infusion could lead to Fed-like stimulus boom Speaking on Tuesday to reporters on behalf of the Business Roundtable, an advocacy group Dimon currently chairs, he said the act of repatriating corporate cash held outside the U.S. back into the country would spur substantial economic growth, regardless of how… Continue reading Cash On The Sidelines
Bloomberg Gadfly – Are U.S. Stocks Just Beginning to Get Expensive? Federal Reserve officials were widely expected to raise their target for benchmark interest rates on Wednesday, and they didn’t disappoint. In doing so, they also instantly made U.S. stocks more expensive, according to one measure of valuations. The so-called Fed model says that U.S. stocks… Continue reading More Scary Talk About The Stock Market
The Financial Times – Junk bond funds see biggest outflows since late 2014 Investors concerned about high prices for speculative debt Junk bond funds saw their biggest outflows since December 2014, as investors expressed concern about high prices for speculative debt and falling energy prices put pressure on companies in the sector. Investors withdrew $5.7bn… Continue reading Junk Bond Outflows
Comment Yesterday we highlighted our bearish arguments for crude oil. Among them was the huge long position by speculators. Their thinking continues to infiltrate opinion about the oil market. Bloomberg View – Oil Traders Have Lots of Reasons to Be Bullish The current timing mismatch between the U.S. production ramp-up and OPEC cuts should be brief.… Continue reading More Bullish Talk About Crude Oil
Bloomberg Business – Chinese Treasury Holdings Dip in January Amid Capital Flight China’s holdings of U.S. Treasuries declined as the world’s second-largest economy used its foreign-exchange reserves to support the yuan. Japan, America’s largest foreign creditor, increased its holdings for the first month in six. A monthly Treasury Department report released in Washington on Wednesday showed… Continue reading China’s Holding Of Treasuries