The Wall Street Journal – Hedge Funds Stalk Battered Corner of Bond World Closed-end funds trade at lowest levels since the financial crisis Wall Street traders are circling a corner of the bond world they say is taking an unwarranted beating in anticipation of rising interest rates. They are betting on closed-end funds, often-volatile structures… Continue reading Hedge Funds Bet On Closed-End Bond Funds
The Wall Street Journal – U.S. Home Price Growth Gains Momentum in September, Case-Shiller Says Economists warn that steep price gains will hurt affordability Home price growth accelerated in September, according to a report released Tuesday, underscoring concerns that lofty price gains are helping to keep some buyers out of the market. The S&P/Case-Shiller Home… Continue reading Home Prices Rise In September
Bloomberg View – Jacob Lew: The Risk in Rolling Back Wall Street Reform The bottom line is simple: Wall Street reform is working. Seven years after the financial crisis, and five years after Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, the economy is back on solid footing. Our financial system is… Continue reading Wall Street Reform
Charts of the Week Topics Covered This Week Include: Is The Two-Year Note Discounting A Rate Hike? Will The Euro Hit Parity? The Mechanics Of The Rate Hike Q3 2015 Earnings And Revenue Expectations Q3 2015 Earnings And Revenue Beat Rates Guidance Index Inflation How Many U.S. Treasuries Did China Sell In September? Selling Bond… Continue reading Charts of the Week
<Click on chart for larger image> The Wall Street Journal – Will the Euro Fall to $1? Interest Rates Aren’t Investors’ Only Guide Many believe the euro will weaken as U.S. and European policy diverges—but history suggests investors shouldn’t be quite so sure The euro has tumbled against the dollar in recent weeks, largely because… Continue reading Will The Euro Hit Parity?
Comment Many are pointing to the fact that the 2-year note is closing in on 1.00% as proof the market is discounting a hike. See the chart below. <Click on chart for larger image> We believe it is next to impossible to determine what the market has priced in using absolute levels. So, we use… Continue reading Is The Two-Year Note Discounting A Rate Hike?
<Click on chart for larger image> MarketWatch – Goldman Sachs forecasts four rate hikes next year Recovery to cross ‘finish line,’ lead to faster rate increases The Federal Reserve’s benchmark U.S. interest rate could rise twice as much as Wall Street expects in 2016. So says the prominent investment bank Goldman Sachs. The central bank… Continue reading Market Vs Economist Expectations – Updated
Bloomberg.com – OPEC Seen Holding the Line as $40 Crude Looms Over Vienna All 30 analysts surveyed see OPEC policy unchanged on Dec. 4 Saudi strategy taking effect even as other members protest It’ll take more than $40 crude to make OPEC change its mind, analysts said before the group’s Dec. 4 meeting in Vienna.… Continue reading What Will OPEC Do?
The Financial Times – QE has clouded market vision on what is normal Changes in policy are often accompanied by market disruption, writes John Plender As market expectations on the timing of the long-predicted rise in US interest rates have swung wildly back and forth in recent months the Federal Reserve has been excoriated for… Continue reading Fed-Induced Market Distortions
<Click on graphic for larger image> The Wall Street Journal – The Oxford Economist Running the Fed’s Interest-Rate Machine Simon Potter is charged with implementing mechanisms that will raise interest rates when Fed policy makers make that call The 55-year-old, British-born head of markets at the Federal Reserve Bank of New York had never worked… Continue reading Meet Simon Potter
Bloomberg Business – Economist: Major Portions of the Fed’s Case for Liftoff Are Way off Base Mistakes in the minutes. “There’s so much wrong here one hardly knows where to begin,” he fumed. Uncertainty would rise regardless of whether the Fed stayed on hold or hiked rates absent a reasonable explanation for why monetary policymakers… Continue reading Concern Over The Rate Hike