Charts of the Week Topics Covered This Week Include: A Detailed Discussion Of Fed Hike Probabilities Why Is The Fed Funds Marketing Disappearing? Why Is The Fed Funds Marketing Disappearing? – 2 Overnight Fixed-Rate Reverse Repo or ON RRP Market Expectations vs Fed Expectations An Earnings Update An Revenue Update Company Guidance Index Betting On… Continue reading Charts of the Week
The Wall Street Journal – Jon Hilsenrath: Atlanta Fed’s Lockhart: Fed Is ‘Close’ to Being Ready to Raise Short-Term Rates Federal Reserve Bank of Atlanta President Dennis Lockhart said the economy is ready for the first increase in short-term interest rates in more than nine years and it would take a significant deterioration in the… Continue reading Could Both Economists And The Market Be Right About A Fed Hike?
<Click on chart for larger image> The Wall Street Journal – The Federal Reserve Is Ready for Rate Increases, but Bond Market Is Skeptical Federal Reserve officials have signaled they think the economy is robust enough to withstand a round of interest-rate rises starting this year. But the bond market still seems skeptical. While yields… Continue reading Market Expectations vs. Fed Expectations
<Click on graphic for larger image> MoneyBeat (WSJ Blog) – M&A Borrowing Hits a Fresh Record Amid Deal Splurge Companies are issuing debt at record rates to fund acquisitions in a move at least partly motivated by expectations of a rise in U.S. borrowing costs. Acquisition-related bond issuance has reached $290 billion so far for… Continue reading M&A Activity
<Click on chart for larger image> MoneyBeat (WSJ Blog) – Don’t Expect Big Things from Small Caps This Month Small caps may spend the rest of the summer in the back seat, underperforming the broader market. After outpacing large-cap gains in the first half of the year, small caps have lagged since the start of… Continue reading Small Cap Stock Seasonality
The Financial Times – IMF signals doubts on renminbi as reserve currency The International Monetary Fund has hailed China’s progress on financial reform but said the renminbi still lags behind rivals on key metrics that determine whether the fund will formally endorse the redback as a reserve currency. The fund’s executive board will make a… Continue reading The Renminbi As A Reserve Currency
<Click on graphic for larger image> The Wall Street Journal – J.P. Morgan Loosens Terms for Jumbo Mortgages J.P. Morgan Chase & Co. is loosening its underwriting criteria for big mortgages, as lenders ramp up competition to grab a bigger share of the high-end housing market. The nation’s largest bank by assets plans to announce… Continue reading Loosening Mortgage Requirements
Bloomberg.com – JPMorgan Reclaims Place Among U.S.’s Top 10 Biggest Stocks Don’t look now, but megacap financial companies are creeping back onto the list of the biggest U.S. companies. With $253 billion in market capitalization, New York-based JPMorgan Chase & Co. just surpassed Procter & Gamble Co. and Wal-Mart Stores Inc. to join the top… Continue reading The Largest Companies By Market Cap
Comment Regular readers know we believe the Fed wants to hike rates for financial stability reasons rather than economic reasons. As we detailed last week, the economy, taken in total, is really no better than it was Q3 2012. The Fed’s current economic forecast is worse than its forecast in Q3 2012. However, in Q3… Continue reading A Detailed Discussion Of Fed Rate Hike Probabilities
<Click on chart for larger image> Quartz – Oil prices are falling again. Here’s Why On the demand side, there is, of course, China—the factor looming over commodities across the globe. Capital Economics suggested in a note to clients that the country’s cratering stock market is having an effect on other markets. Beyond that is… Continue reading Crude Oil Falls
<Click on chart for larger image> Arbor Quantitative Analytics – August is the Worst Month for TIPS Breakevens August is the worst month of the year for TIPS breakevens. 5yr breakevens have fallen in August in 9 of the past 13 years (69%). 10yr breakevens have narrowed in 12 of the past 17 years (70%).… Continue reading TIPS Breakevens Seasonality