<Click on chart for larger image> The Financial Times – Market-based US inflation gauge tops 2% for first time since 2014 A key measure of market expectations for US inflation has crossed the 2 per cent threshold for the first time in more than two years, the latest sign that investors are bracing for more… Continue reading 5-Year Inflation Breakevens Hit Fed’s 2% Target
<Click on graphic for larger image> Bloomberg.com – Dow 20,000: Your Gift for Living Through Brexit and the Election To be sure, gains have settled down after velocity in the stock market reached some of its highest readings ever. The Dow had fallen in eight of the prior 11 days. That’s a far cry from… Continue reading Stock Returns Since Trump’s Election
MarketWatch – Caroline Baum: Nineties’ mantra of ‘a strong dollar’ is retooled for the Trump era Paul O’Neill, President George W. Bush’s first Treasury secretary, dared to speak the truth about U.S. dollar policy and was summarily slapped. In February 2001, O’Neill was quoted by a German newspaper as saying the U.S. doesn’t “follow, as… Continue reading A Strong Dollar
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Charts of the Week Topics Covered This Week Include: An Updated Look At Earnings Expectations An Updated Look At Revenue Expectations Earnings And Revenue Beat Rates The Strong Dollar and U.S. Credit Markets Inflation Expectations – Most Stable Rise In History A Look At Inflation The Rush Into Commodities The Rush Into Commodities – 2… Continue reading Charts of the Week
The Financial Times – Growth and inflation trades add shine to miners Investors are signalling a stronger US economy and the risk of rising inflation under the Trump administration, as robust price gains for precious and industrial metals have this month spurred a rise in miners’ shares. The Wall Street Journal – The Unprecedented Factor Driving Gold… Continue reading Inflation Expectations – Most Stable Rise in History
Click on chart for larger image> Bloomberg Business – Fed Debate Over $4.5 Trillion Balance Sheet Looms in 2017 Calls to shrink portfolio come as economic outlook improve … The sheer weight of the balance sheet helps hold down long-term U.S. borrowing costs, which is why the Fed bought bonds in the first place. If officials… Continue reading Reducing The Fed’s Balance Sheet
<Click on chart for larger image> The Financial Times – ETFs are eating the US stock market Although stock pickers are cutting fees, the trend towards ETFs and passive investing quickened in 2016 Exchange traded funds are eating the US stock market. These charts show just how much these passive investing vehicles now dominate trading activity… Continue reading More On Active vs Passive Investing
Barron’s – Byron Wien: Trump Will Pivot to Moderate Stance … In the second Surprise I said that a combination of pro-growth initiatives would result in a real GDP increase in the United States in excess of 3%. Since the beginning of expansion in 2009, growth in this cycle at less than 2% has been slower… Continue reading Byron Wien On Trump And The Markets
MarketWatch.com – Howard Gold: Why there may not be a bloodbath in the bond market after all … But what if rates don’t spike but instead gradually work their way higher? That would mean no bloodbath for bondholders but rather a combination of moderate capital losses and interest-rate gains. That would work out fine for… Continue reading How Rising Yields Could Be Good For Investors
Bloomberg View – Ben Carlson: Markets Are Right More Often Than You Think It seems that a week — or even a day — doesn’t go by without an article story or research report asserting that investors are ignoring a huge risk or potential black swan in the markets. In recent years, there have been warnings… Continue reading Market Efficiency
Bloomberg View – Jason Schenkier: Trump Euphoria Turns to Market Frustration The rally in equities was built on more than just blind optimism, and the S&P 500 hit a new record high yesterday. Trump’s plan to cut taxes would increase business valuations, because after-tax cash flows and future dividends would be larger. Any disruption to… Continue reading Stock Market Woes