<Click on chart for larger image> Bloomberg View – Scott Dorf: Trump’s Plans for Spending Spook Foreign Bond Buyers For most of the past decade, through all the fits and starts in economic growth, the increases in the U.S.’s debt load and worries over whether zero interest rates were fueling market bubbles, foreign central banks,… Continue reading Will Other Nations Follow China in Selling U.S. Treasuries?
<Click on chart for larger image> Bloomberg View – Noah Smith: Why the U.S. Has a Monopoly on Jobless Recoveries …There’s a clear pattern to the chart above. Before the 1990s, every downward dip except for the early ’70s looks sharp and angular, like a letter V. But after 1990, they all look rounded, like the… Continue reading The U.S. Monopoly on Jobless Recoveries
Bloomberg View – Satyajit Das: Why Inflation Won’t Last … Monetary tools alone can’t offset all these trends. Increases in money supply have been substantially offset by reduced velocity or circulation of money. The liquidity supplied is in many cases being held by banks as excess reserves with central banks. This reflects a lack of… Continue reading Headwinds for Inflation
<Click on cartoon for larger image>
The Wall Street Journal – Oil-Output Cuts Proceeding Faster Than Planned OPEC, non-OPEC producers have cut production by 1.5 million barrels a day since agreements, says Saudi minister The Organization of the Petroleum Exporting Countries and Russian officials said Sunday they were making good progress on their pledges to cut back crude-oil production and raise global… Continue reading Crude Oil Supply/Demand
<Click on chart for larger image> Bloomberg – The Rising Risk of Central Bank Instability But the more central banks persist with this approach amid changing economic and fiscal conditions, the greater the potential need for a sudden shift in monetary policy that, while economically warranted, could be quite jarring for markets. And it is a… Continue reading Cracks in the Reflation Trade Could Finally Boost Volatility
Comment We have written many times in the past that FOMC policy is being held hostage by market expectations. In other words, the Fed is perfectly fine with the current Goldilocks state of the economy and does not want to do anything that might create volatility in the markets. In the past, Yellen has been… Continue reading Central Banks Don’t Want To Rock The Boat
<Click on graphic for larger image> The Wall Street Journal – Central Banks Embrace Risk in Era of Low Rates By keeping interest rates low and in some cases negative, central banks have prompted some of the most conservative investors to join the hunt for higher returns: Other central banks. Central banks from Switzerland to… Continue reading Central Banks Join The Hunt For Higher Returns
Fact Set – Earnings Insight For Q4 2016, the blended earnings growth rate for the S&P 500 is 3.4%. If the index reports earnings growth for Q4, it will mark the first time the index has seen year-over-year growth in earnings for two consecutive quarters since Q4 2014 and Q1 2015. <Click on graphic for… Continue reading An Updated Look At Earnings
Bloomberg.com – Beware the Hedge-Fund Wipeout in Treasuries as Bearish Bets Soar There’s a big showdown looming in the U.S. Treasury market. The “fast money,” made up of hedge funds and other speculators, upped its bearish bets like never before this month, based on futures data for five-year notes. At the same time, “real-money” accounts,… Continue reading Speculators Are Bearish Bonds
The Wall Street Journal – Global Uncertainty Gets Brushed Off in the U.S. and Europe Economists warned for months that the U.K.’s vote to leave the European Union could shake household and business confidence and hurt the economy, but it hasn’t played out that way. That’s part of a wider trend across the rest of… Continue reading Unfazed By Uncertainty
<Click on chart for larger image> The Wall Street Journal – China Bitcoin Exchanges to Impose Trading Fee Under heightened scrutiny from Chinese regulators, China’s three largest bitcoin exchanges will seek to rein in speculation in the virtual currency by charging trading fees. BTCC, Huobi and OKCoin plan to charge customers 0.2% per transaction starting… Continue reading China Takes Aim At Bitcoin