Comment Another $600 million came out of the 30 largest high-yield ETFs on Friday. Most of that was withdrawn from the iShares IBOXX High Yield ETF. As the blue panel below shows, $4.7 billion has come out of high-yield ETFs since April 28. <Click on chart for larger image> The chart below shows high yield… Continue reading HY ETF Update
<Click on graphic for larger image> The Wall Street Journal – Windfall for Central Banks Fuels Political Pressure The financial crisis has been a cash cow for central banks. They are turning record profits, bolstered by income from their bulging asset and loan portfolios and, more recently, from charging banks for making deposits. The windfall… Continue reading Central Bank Profitability
The New York Times – Saudi Minister Has Task of Easing Dependence on Oil He was known as the “maestro,” the man whose every word was dissected by oil traders and moved markets. For two decades, Saudi Arabia’s oil minister, Ali al-Naimi, was the architect of Saudi and OPEC cartel policies, including the one that… Continue reading Saudi Arabia’s Struggle To Become Less Oil-Centric
<Click on graphic for larger image> The Wall Street Journal – Negative Rates Are Better at QE Than Actual QE Going subzero has been more effective at pushing down the term premium of bonds When it comes to unconventional monetary policy, negative rates appear to be making more of a splash than quantitative easing. Just… Continue reading QE vs. Negative Rates
<Click on graphic for larger image> Bloomberg.com – ‘Paralyzing Volatility’ Means Trouble for Wall Street Giants Economic worries exacerbate `structural’ shift in trading More shocks, less liquidity reflect change in nature of market There’s plenty of volatility, but what happened to the volume? From stocks to currencies and bonds, the upswing in turbulence to start… Continue reading Volatility
The Wall Street Journal – Falling Dollar a Risky Premise for Rally in Other Assets Analysts at Morgan Stanley measured the correlation between a weak dollar and their own index of investor appetite for riskier assets. They found it near its highest level in 20 years. The concern is that it is a relationship that… Continue reading The Dollar & Risk Assets
<Click on graphic for larger image> The Wall Street Journal – The Rise of Knowledge Workers Is Accelerating Despite the Threat of Automation Occupations with cognitive tasks that aren’t routine are adding the most jobs in decades. As recently as the mid-1980s, you could categorize American workers into roughly three equal-sized groups of about 30… Continue reading Robots Can’t Take All Our Jobs
<Click on graphic for larger image> Bloomberg Business – Treasury’s Complaint Box Overflows as U.S. Bond Market Splinters Concern bubbles up in answers to survey on market evolution For traders of U.S. Treasuries, the easy part was agreeing some corners of the market need to be more centralized. Now comes the real challenge: figuring out… Continue reading Traders Complain To The Treasury About The Bond Markert
<Click on cartoon for larger image> We are truly jealous of Jeff Lewis’ mug collection! Who will be next? <Click on picture for larger image>
The Wall Street Journal – Jon Hilsenrath: Jobs Report Makes June Rate Rise by Fed Less Likely Nonfarm payrolls growth slowed to a seasonally adjusted increase of 160,000 in April Friday’s jobs report will keep the Federal Reserve in standby mode as it considers whether and when to push short-term interest rates higher again, diminishing… Continue reading Employment In Pictures
<Click on graphic for larger image> Bloomberg.com – Biggest Junk-Bond ETF Jolted by Massive Redemptions Amid Rally The largest exchange-traded fund that buys junk bonds may be flashing a warning that a three-month rally in the debt may be coming to an end. BlackRock Inc.’s iShares iBoxx High Yield Corporate Bond ETF has seen 27.8… Continue reading How Significant Are Recent Junk Bond ETF Redemptions?
<Click on image to view video> Comment Yesterday Jim Bianco was on Bloomberg Asia talking about the upcoming U.S. jobs report, U.S. interest rates and the outlook for the markets. To the interview, click on the image above. To view any of our recent interviews, click here.