Fact Set – Will the S&P 500 Actually Report a Decline in Earnings for Q2 2016? Based on the average change in earnings growth due to companies reporting actual earnings above estimated earnings, it is likely the index will report a smaller decline in earnings than 5.6%. However, based on this average, the index is… Continue reading Earnings Season Starts This Week
<Click on chart for larger image> The Wall Street Journal – Black Hole of Negative Rates Is Dragging Down Yields Everywhere The free fall in yields on developed-world government debt is dragging down rates on global bonds broadly, from sovereign debt in Taiwan and Lithuania to corporate bonds in the U.S., as investors fan out… Continue reading Negative Rates
The Financial Times – US stocks and bond yields in record territory due to uncertainty US stocks rose towards a new record while government bond yields closed at fresh lows on Friday after a strong US jobs report renewed investors’ faith in the US economy, but failed to convince them that the Federal Reserve would… Continue reading More On Uncertainty
The Financial Times – Need for yield sends bond and equity prices in lockstep to record A fundamental relationship between bonds and equities has broken down as the pressure for returns intensifies in an ever-expanding world of negative interest rates. An insatiable thirst for income has driven both US bond yields and equity prices —… Continue reading Stock/Bond Correlation
Bloomberg View – Why Traders Have Lost Their Touch Today’s traders and portfolio managers — self-described Masters of the Universe — have hardly covered themselves in glory recently. Their surprise and initial panic at the Brexit result doesn’t say much for the extraordinary foresight, skill at managing risk and large pay packages many of them claim.… Continue reading Active vs. Passive Management
Barron’s – Jeffrey Gundlach on Stocks, Trump, and Gold The head of DoubleLine Capital discusses his outlook on the post-Brexit stock and bond markets. The markets have been relatively calm so far, leading some to muse that other repercussions might not be so bad. Don’t bet on it, says Jeffrey Gundlach, CEO of Los Angeles–based… Continue reading Gundlach Speaks
<Click on chart for larger image> The Wall Street Journal – Hilsenrath Analysis: June Jobs Report Raises Chances of Fed Rate Increase in September Relieved Federal Reserve officials aren’t likely to see Friday’s strong jobs report as a reason to raise short-term interest rates when they meet later this month, but the numbers do increase… Continue reading Timing The Rate Hike
<Click on graphic for larger image>
Bloomberg.com – Narayana Kocherlakota: Three Antidotes to the Brexit Crisis Britain’s vote to leave the European Union has put a lot of stress on global financial markets: Even as I write, investors’ flight to safety has pushed the yield on U.S. Treasury bonds down to levels that I would have deemed inconceivable just six months… Continue reading Kocherlakota Speaks On Brexit
The Telegraph – Bank of England poised to slash interest rates to shore up economy The Bank of England is poised to slash interest rates to close to zero this week as fears mount over a Brexit-induced recession. Economists believe the Monetary Policy Committee (MPC) will cut rates to a new low of just 0.25pc… Continue reading BoE To The Rescue
Bloomberg.com – A 50-Year U.S. Bond Makes More Sense Than Ever Why isn’t the U.S. selling Treasuries with longer maturities while it tries to get its fiscal house in order? We learned the hard way during the credit crisis that financing long-term debt by constantly rolling over short-term paper is a recipe for disaster. Or… Continue reading Calling For A 50-Year Bond
None Today