<Click on chart for larger image> Comment The chart above shows the activity in long-only crude oil ETFs. Since the November 28, 2014 FOMC meeting, $8.2 billion of new money has flowed into these funds (second panel, blue line). During that period prices collapsed, so total assets in these funds grew by only $4.6 billion… Continue reading Crude Oil Update
<Click on chart for larger image> The Wall Street Journal – Jon Hilsenrath: Awaiting Closing Arguments from The Chair on Rate Move Given this history, it is striking that now, as the Fed considers raising short-term interest rates for the first time in nearly a decade, Fed Chairwoman Janet Yellen has gone through an unusually… Continue reading What Will The Fed Do?
The Financial Times – High-frequency traders: bond market scourge or saviour? The $12tn Treasury market is integral to the global economy and HFT groups are an increasingly influential part of an evolving ecosystem that has a direct impact on the cost of funding for the US government. While none are primary dealers, responsible for underwriting… Continue reading HFT In The Bond Market
<Click on chart for larger image> The New York Times – Greenlight Capital Down 14% for Year; David Einhorn Surveys Investors David Einhorn has earned a reputation as one of the savviest stock pickers on Wall Street. But the recent market turmoil has not spared him, and this year is shaping up to be one… Continue reading Hedge Funds Struggle … What Else Is New?
Comment The chart below shows the month of September is historically the worst month of year to own stocks. <Click on chart for larger image> The next graphic shows poor summers lead to poor Septembers. This summer the S&P 500 was down 6.42%. <Click on graphic for larger image>
Bloomberg Business – S&P Rout Has Room to Go If Bond Spreads Have Anything to Say Yield premiums on investment-grade debt have widened by 32 basis points over the past three months, according to Bank of America Merrill Lynch index data. Since 1996, there have been five occasions when credit spreads showed similar expansions. Two… Continue reading More On Credit Spreads
Bloomberg.com – Noah Smith: Economics Has a Math Problem Not so in econ. Traditionally, economists have put the facts in a subordinate role and theory in the driver’s seat. Plausible-sounding theories are believed to be true unless proven false, while empirical facts are often dismissed if they don’t make sense in the context of leading… Continue reading Math In Economics
The Financial Times – China turns up heat on market participants Beijing intensified its clampdown on stock market impropriety and rumour-mongering on Tuesday as the whereabouts of one of China’s leading hedge fund managers remained unclear. The husband of Li Yifei, Man Group China head, denied that she was in detention. An earlier Bloomberg report… Continue reading China, The Arrests Will Continue Until The Bull Market Returns!
FT Alphaville – Will Treasury yields soar if China sells? It turns out that reserve managers are downright allergic to long-dated Treasury bonds, and disproportionately invest at the front end. That was true in 2005-6 and it’s even truer now. (All the data on US debt maturity is in the downloadable spreadsheet here.) As we… Continue reading Treasuries And China
The Financial Times – Why stock trackers flock to the S&P 500 With big swings in the US stock market of late, headlines have focused on “the Dow”, but there are $7.8tn worth of reasons why people should be thinking about another index.For the general public, the Dow Jones Industrial Average, first calculated in 1896… Continue reading About The S&P 500
None Today
Comment Thursday and Friday of the last week crude oil had one of its best 2-day percentage gains ever (futures trading started in 1983). However, as the table below shows, 6-months after a big 2-day percentage gain, crude oil prices are mixed, meaning that a big 2-day gain alone means little. <Click on table for… Continue reading What’s Next For Crude Oil?