Project Syndicate – Robert Shiller: How Scary Is the Bond Market? The prices of long-term government bonds have been running very high in recent years (that is, their yields have been very low). In the United States, the 30-year Treasury bond yield reached a record low (since the Federal Reserve series began in 1972) of… Continue reading Bond Sentiment Update, Now Bob Shiller Likes Bonds!
The Wall Street Journal – Oil Prices Fall to Six-Year Intraday Low The benchmark U.S. oil price tumbled to its lowest point in six years during intraday trading on Monday on signs of a deepening supply glut. Crude prices extended losses in early New York trading on a report, issued by a private data provider,… Continue reading Betting On Crude Oil
Comment In the interview above Bloomberg’s Barry Ritholtz likens gold bugs to the boy who cried wolf with their constant calls for a bottom in prices. While the past few years have not been kind to the shiny yellow metal, we actually believe gold has many factors working in its favor at the moment. First,… Continue reading A Few Reasons To Like Gold
Arbor Quantitative Analytics – Economic Data sans Payrolls/Sentiment Hurting Chances for Rate Hike Market expectations (Eurodollars/Fed Funds futures) for short-term interest rates are following slowing economic data away from strong payrolls. A model including payrolls estimates a need for a Fed Fund target rate of 1%, while its exclusion suggests less urgency by the FOMC… Continue reading More On The Discrepancy Between Payrolls & Most Other Economic Data
<Click on graphic for larger image> The Wall Street Journal – Timing of Fed Rate Move Remains Clouded The dollar’s surge and concerns about growth around the globe add to investors’ uncertainty More investors are betting that the Federal Reserve will raise short-term interest rates as soon as June, shrugging off signs that the U.S.… Continue reading More On The Fed
Reuters – Currency swings cost U.S. corporates $18.66 billion in the fourth quarter: study Foreign exchange swings cost North American corporates $18.66 billion in revenue in the fourth quarter, according to a report by currency risk management consulting firm FiREapps. Total negative currency impact rose more than four-fold in the fourth quarter from the previous… Continue reading How Much Does A Strong Dollar Hurt Earnings?
<Click on graphic for larger image> The Financial Times – Greek tactics annoying eurozone partners, says Belgium Although Mr Van Overtveldt says he agrees with Mr Varoufakis that the Greek programme has been a “failure”, he believes authorities in Athens are to blame — not creditor countries. “It works in Spain, it works in Portugal,… Continue reading Greece’s Problems Will Not Go Away
Project Syndicate – Mohammed El-Erian: The Messy Politics of Economic Divergence The world is increasingly characterized by divergence – in economic performance, monetary policy, and thus in financial markets. Global divergence has already contributed to stock-market volatility, unprecedented declines in advanced economies’ government bond yields, and outsize currency movements. And the trend is not abating,… Continue reading Divergent Policies
The Financial Times – John Plender: Draghi QE is stoking bond bubble risk Eurozone bond prices are losing touch with fundamentals Government bond markets are supposed to be sedate places, devoid of the thrills and spills that characterise equities. Not any more. Since central banks started enlarging their balance sheets sovereign bonds have become exciting… Continue reading Is Euro QE Creating A Bond Bubble?
Bloomberg.com – Funds Run by Robots Now Account for $400 Billion Few people have profited more from the so-called smart-beta craze than Tom Dorsey. A new exchange-traded fund that he runs using a century-old charting methods took in $1.2 billion last year. Then, in January, he sold his 22-person investment firm, Dorsey, Wright & Associates,… Continue reading Meet Your Next Fund Manager, A Robot
None Today
The Wall Street Journal – Justin Lahart: Fed Will Bark Before It Bites Markets aren’t ready for the Federal Reserve to tighten policy, but it may be trying to change that A small rise in interest rates by the Federal Reserve should have little effect on the economy. But that is only if markets don’t… Continue reading “Patient” Watch