Comment With Q1 earnings now largely in the rearview mirror, the markets will begin to focus on Q2 2016 earnings season. As this process gets underway, results must be gauged in light of already lowered estimates from analysts. We have covered the gamed nature of earnings estimates many times in the past. In a nutshell,… Continue reading A Historical Look At Earnings
<Click on chart for larger image> The Wall Street Journal – OPEC’s Ability to Ease An Oil Supply Shock is Now Fading OPEC’s ability to ease the pain of an oil-supply shock is slipping. For half a century, the Organization of the Petroleum Exporting Countries has buffered global crude markets, curtailing production to ease oil… Continue reading OPEC Cannot Produce Any Faster, But Shale Producers Can
<Click on chart for larger image> The Financial Times – Triple A quality fades as companies embrace debt The triple A rated company is nearly extinct. Just a handful of companies in the world retain the coveted rating from Standard & Poor’s after ExxonMobil was downgraded last month. In the US, the number has fallen… Continue reading Say Goodbye To AAA-Rated Corporations
MoneyBeat (WSJ Blog) – Economy Doesn’t Need a June Hike, It Needs a Jubilee Year – Rosenberg Why exactly is the Federal Reserve interested in raising rates again? “Unlike other periods of tightening, there is no boom, no evident inflationary pressures or perceived bubbles to respond to,” said David Rosenberg, the chief economist at Canadian… Continue reading Questioning The Fed’s Data Dependency
<Click on chart for larger image> The Financial Times – Hedge funds: Overpriced, underperforming According to Chicago-based Hedge Fund Research, pension funds and other big institutions now account for only 43.1 per cent of hedge funds’ assets, from 47 per cent three years ago. The reasons for moving their money mix populist politics — many… Continue reading Hedge Fund Investors
<Click on chart for larger image> The New York Fed – Quarterly Report on Household Debt and Credit Aggregate household debt balances increased in the first quarter of 2016. As of March 31, 2016, total household indebtedness was $12.25 trillion, a $136 billion ( 1.1%) increase from the fourth quarter of 2015. Overall household debt… Continue reading Household Debt Remains Below 2008 Peak
Bloomberg.com – Quest for Robo-Yellen Advances as Computers Gain on Rate Setters Move over Janet Yellen, automation in the workplace is about to get personal. Instead of relying on the Federal Reserve chair, imagine using a computer to transform mountains of raw economic data into reliable predictions for unemployment, inflation and gross domestic product. What’s… Continue reading Robots Will Eventually Take All Our Jobs
LinkedIn – Treasury Market Liquidity: The Forgotten 98% The Fed and the Treasury describe the U.S. Treasury market as, “the deepest and most liquid government securities market in the world.” While arguably true for the six on-the-run (OTR) benchmark securities, those six securities make up less than 2% of the total $13.4 trillion of total… Continue reading More On Treasury Liquidity
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Forbes – Fund Flows Are More Bearish Than They Appear I used the ETF function on Bloomberg to download all North American Equity ETF fund flows for 2016. 691 funds had year to date outflows of $5.6 billion, but I wanted to examine these flows in more detail. I take a reduced set of 56… Continue reading Fund Flows
<Click on graphic for larger image> Bloomberg.com – Banks Keep Cutting Bond Traders as One-Third Gone Since 2011 The world’s biggest banks have shed about one in three bond traders since 2011 as rules making some businesses less profitable dovetail with volatile markets that are spooking investors, according to research from Coalition Development Ltd. The… Continue reading Where Have All The Bond Traders Gone?
<Click on chart for larger image> MoneyBeat (WSJ Blog) – This Market Refuses to Get Punked by the Fed Again The Federal Reserve wants you to believe that the June policy meeting could result in the bank raising interest rates. Really. It could happen. They want to do it. No kidding. There’s been a virtual… Continue reading The Fed Is The Boy Who Cried Wolf