Bloomberg Business – Credit Risk Is Staging a Comeback For years, investors poured money into junk-rated corporate debt with impunity. Arguably, bonds were bought indiscriminately, with seemingly little thought about the actual risk of a company defaulting on its debt. Interest rates, after all, were hovering at zero percent, money was plentiful, and there seemed… Continue reading Differentiating Credit
Comment Yesterday the two-year note hit 0.76%, its highest level since 2011 (the last time the market was dead-sure the Fed was about to hike rates). Many are saying this proves the market is discounting a hike. See the chart below. <Click on chart for larger image> We believe it is next to impossible to… Continue reading Is The Two-Year Note Discounting A Rate Hike?
<Click on graphic for larger image> Arbor Quantitative Analytics – Waiting for 3+% Wage Growth? Take a Seat… Subdued small business expectations and a still wide U-3 vs U-6 differential are likely holding back 3+% wage growth. Model estimates suggest such growth is still 10 to 16 months away. Comment The chart above comes from… Continue reading Wage Growth
Bloomberg Business – The Fed’s New Repo Tool Could Affect Millions of U.S. Home Loans The alphabet soup of financial acronyms is about to get more crowded with the expansion of the Fed’s overnight reverse repo agreements (known as overnight RRPs). While the dynamics here are complicated, they bear watching since they could have implications… Continue reading The Fed’s Repo Tool
<Click on graphic for larger image> Bloomberg.com – The Odds of a September Rate Hike Have Surged in the Last Two Days Traders have never been more convinced of a September rate hike by the Federal Reserve. The chances of an interest-rate increase next month reached 52 percent Wednesday, up from just 38 percent just… Continue reading Timing The First Rate Hike
<Click on chart for larger image> The Financial Times – Dollar rise: further to go or finished? Stronger dollar presents problems for many areas in financial markets A stronger dollar therefore clearly presents problems for many sectors of financial markets, and not surprisingly some fear further appreciation in the world’s reserve currency will spark greater… Continue reading The Strong Dollar
<Click on chart for larger image> The Financial Times – John Authers: A ‘show me the money’ US equity market S&P 500 performance led by growth stocks as value languishes Perhaps it is appropriate in a week when Tom Cruise has a big new film out that the US has a “show me the money”… Continue reading 2015 S&P 500 Performance
The Financial Times – Robin Wigglesworth and Elaine Moore: Debt markets: After the binge Low interest rates sparked record bond issuance but with rates set to rise the market is anxious Bond markets were in turmoil, some banks were teetering and all were severing their lending lines even to their most creditworthy clients. “Everyone told… Continue reading Bond Issuance As Rates Are Set To Rise
Bloomberg Business – Commodities Are Crashing Like It’s 2008 All Over Again Attention commodities investors: Welcome back to 2008! The meltdown has pushed as many commodities into bear markets as there were in the month after the collapse of Lehman Brothers Holdings Inc., which spurred the worst financial crisis seven years ago since the Great… Continue reading Commodities Continue To Fall
Reuters.com – James Saft: The vanishing public company The number of publicly traded U.S. firms is now lower than at any time during the past 40 years and small investors, if not the economy as a whole, may pay the price. Since 1996, U.S. listings per capita have fallen, according to a study published in… Continue reading Why Companies No Longer Want To Go Public
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