<Click on chart for larger image> The Financial Times – Slide continues for junk bond ETFs Government bond sell-off and falling oil price reverberate across credit markets Two of the largest junk bond exchange traded funds suffered their fifth straight day of losses on Monday, as last week’s sell-off in government bonds and the drop… Continue reading High Yield Outflows Continue
The Wall Street Journal – What to Watch at This Week’s Fed Meeting A December rate increase is widely expected, but some Fed officials are wary of signaling they are likely to move at a particular date Federal Reserve officials are likely to leave short-term interest rates unchanged when they meet Tuesday and Wednesday, just a… Continue reading FOMC Preview
Project Syndicate – Would Higher Interest Rates Boost US Growth? Blackstone CEO Tony James recently published a column in the Financial Times titled “To revive America’s economy, raise interest rates.” This is a very bad idea. Let us imagine that we have been transported to a parallel universe, one where the US Federal Reserve has not… Continue reading Would Higher Rates Actually Help The Economy?
CNBC – Shadow banks are taking over the mortgage market again Shadow banks are on the cusp of taking the lead from their commercial counterparts in the mortgage market, new data suggests, a phenomenon that hasn’t been seen since the 2008 financial crisis. Non-bank lenders, which inhabit the comparatively lightly regulated industry, accounted for 48 percent… Continue reading Shadow Banks Are Back
Bloomberg Business – Carney to Stay at BOE Until June 2019 to Help Address Brexit Bank of England Governor Mark Carney will extend his time in office by a year to 2019 to guide the economy through Britain’s split from the European Union. Choosing a middle path between leaving in 2018 as planned or remaining until… Continue reading Carney Stays
The Financial Times – Bond valuations are the Achilles heel of markets Investors are nervous but it is too soon to say whether low-rate era is about to end The recent sharp rise in US Treasury bond yields is telling us something important; and not just that there is an overwhelming probability that the Federal… Continue reading Bond Valuations
<Click on graphic for larger image> Bond Vigilantes – It’s Halloween. Here are some scary charts Developed market government bonds have been one of the best performing asset classes in 2016, confounding many predictions at the start of the year. In general, the right trade has been to own long duration assets, indeed the longer the better. Year after year… Continue reading Scary Halloween Charts A Day Late
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The Wall Street Journal – FBI in Internal Feud Over Hillary Clinton Probe Laptop may contain thousands of messages sent to or from Mrs. Clinton’s private server The surprise disclosure that agents from the Federal Bureau of Investigation are taking a new look at Hillary Clinton’s email use lays bare, just days before the election,… Continue reading An Election Update
FactSet – Earnings Insight for October 28, 2016 Earnings Scorecard: As of today (with 58% of the companies in the S&P 500 reporting earnings for Q3 2016), 74% of S&P 500 companies have reported earnings above the mean estimate and 58%of S&P 500 companies have reported sales above the mean estimate. Earnings Growth: For Q3… Continue reading An Earnings Update
The Wall Street Journal – Greg Ip: Inflation, Long Quiescent, Begins to Stir After being given up for dead, inflation is gradually coming back to life. It’s not roaring back. Indeed, it’s still below the 2% level the Federal Reserve targets, one reason the Fed is almost certain to leave interest rates unchanged when it… Continue reading The Return Of Inflation?
<Click on graphic for larger image> Real Time Economics (WSJ Blog) – What ‘Expansions Don’t Die of Old Age’ Really Means Economists expect the U.S. to face another recession in the next four years. After all, the current expansion is already more than seven years old, and since World War II the average period of economic growth… Continue reading Calculating The Odds Of A Recession