<Click on graphic for larger image> The Wall Street Journal – Stocks and Bond Yields Diverge Most Since 2007 Bonds and stocks have both gotten clobbered in recent days, reversing the traditional relationship between the two in a way that’s only happened during shifts in Federal Reserve policy over the past decade. Many associate a rising stock… Continue reading The Relationship Between Stocks And Bonds
ValueWalk – What Is Inflation And How Is It Measured Until 1980, the rate of inflation was reported as an increase of the money supply in circulation. The more means of payment the bigger inflation. It was very simple and transparent system. After 1980, a new way was introduced – an attempt to quantify a… Continue reading Measuring Inflation
<Click on graphic for larger image> Bloomberg.com – The Bond Market Is Flashing a Signal That Traders Haven’t Seen Since 2012 The $13.6 trillion Treasuries market is sending a signal it hasn’t flashed in more than four years. The message: short-dated debt is the place to be. The extra yield that investors demand to own… Continue reading The Yield Curve’s Steepening
<Click on graphic for larger image> AQA – Peter Forbes: Fade Steepening in Sovereign Curves Sovereign curves across the globe have steepened sharply in the past month. The remarkably synchronized rise in long end yields began in Japan but has spread through Europe, the UK and North America. Our Risk On/Off Model as well as… Continue reading Fade Steepening in Sovereign Curves
The Wall Street Journal – Paradise Lost: Why the Good Times Are Over for Global Bonds The global bond market has slipped its central-bank anchor. The days of bond nirvana, where seemingly every month brought lower yields—and higher prices—are over for now. Until September, fixed-income investors had everything going their way. Global inflation has been… Continue reading Rising Yields
The Wall Street Journal – Why the Stimulus from Low Oil Prices Never Really Boosted the Economy When oil prices first plunged in 2014, there was hope that cheap gasoline would be a giant stimulus for the U.S. economy. Federal Reserve Chairwoman Janet Yellen cited a statistic that the average household would save $700 in fuel costs. Two years… Continue reading Lower Oil Prices Did Not Boost The Economy
Bloomberg.com – Tisch Says Fed Stuck in a Hole Causing ‘All Manner of Problems’ Jim Tisch, the chief executive officer of Loews Corp., said the Federal Reserve has distorted markets by sticking with ultra-low interest rates. “We have the lowest interest rates in the U.S. and around the world that we’ve ever had in the… Continue reading Criticizing The Fed
<Click on graphic for larger image> Bloomberg.com – Volume in the Volatility Market Absolutely Exploded During Tuesday’s Rout Two investor obsessions, volatility and exchange-traded notes, are being taken to increasingly extreme lengths in the U.S. stock market. For the first time on record, the iPath S&P 500 VIX Short-Term Futures ETN recorded more volume on… Continue reading Stocks Are Yesterday’s News. Everyone Wants To Trade The VIX
<Click on graphic for larger image> The Wall Street Journal – Greg Ip: Fiscal Policy Makes a Quiet Turn Toward Stimulus For years, the world has looked to central banks to deploy whatever tools they had to prop up economic growth. Now, just as those tools reach their limits, governments are quietly stepping up. Fiscal policy across the… Continue reading Fiscal Policy vs. Monetary Policy
The Wall Street Journal – Bank of England Flags Further Rate Cut as It Stands Pat The Bank of England held its benchmark rate steady on Thursday but telegraphed that it still expects to cut it again later this year if the U.K. economy weakens as officials expect. The BOE said in a monthly policy… Continue reading The Bank Of England Expects Another Rate Cut This Year
<Click on graphic for larger image> Business Insider – The one statistic every bond investor should know If you’re a passive fixed-income investor trying to make sense of last Friday’s sell-off, the one statistic you must check—and now—is the average duration of your portfolio. Why? Because investors who have moved to passively managed global aggregate bond funds—which… Continue reading Duration
<Click on graphic for larger image> Bespoke – Crude Oil Inventories Don’t Reverse Crude oil inventories showed an unexpected decline even as traders were expecting last week’s monster drawdown to reverse itself partially. While traders were expecting crude stockpiles to increase by 4 million barrels, they actually declined by 559K. To put that in perspective,… Continue reading Crude Inventories