The Financial Times – Negative rates to shake up financial system, say experts Falls in European interest rates into negative territory could profoundly affect the workings of the financial system and there is little chance of benchmark borrowing costs rising in the year ahead, top investment managers and strategists have warned. Yields, which move inversely… Continue reading The Meaning Of Negative Rates
<Click on graphic for larger image> Barron’s – Oil Prices: Four Experts Size Up the Energy Market Four experts explain what’s ahead and highlight the best investment opportunities in the energy sector. Perhaps the biggest surprise of 2014 was the sharp decline in oil prices. Black gold fell almost 60% from its summer peak of… Continue reading When Was The Crude Oil Sell Signal?
Barron’s – Appaloosa Cut U.S. Stocks By 40% as Tepper Exits Citigroup Billionaire investor David Tepper reduced his firm’s investments in U.S. stocks last quarter, liquidating stakes in some of the largest companies. The value of Appaloosa Management’s publicly disclosed U.S. equity positions dropped by $2.74 billion last quarter to $4 billion, according to a… Continue reading One Billionaire Joins The Bearish Crowd, Another Proves Stock Picking Is Impossible
Reuters – Emerging fund managers stuck in buy-and-hold as trading shrivels A collapse in day-to-day trading in emerging bonds is forcing fund managers to increasingly rely on buy-and-hold investment strategies, with more and more of them unable to sell securities when they most need to do so. There is a disconnect between booming new issue… Continue reading Emerging Markets
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<Click on table for larger image> Comment The table above shows the results of the Bloomberg’s survey of economists. In the latest survey 91% of economists are looking for higher yields in the next six months. This marks the lowest level of bearishness in the last 14 months, but economists remain almost universally bearish. CNBC… Continue reading Bond Sentiment
<Click on chart for larger image> Comment The current crisis started in May 2010. Since then, Greece has been “bailed out” numerous time. As the red line in the chart above shows, the Greek economy has been a horror show. Its decline of roughly 25% in real terms rivals the Great Depression. The new Greek… Continue reading More On Greece
The Wall Street Journal – Bundesbank to Buy €10 Billion Monthly for QE Move by German Central Bank Is Part of ECB Quantitative-Easing Program, Official Said The Deutsche Bundesbank will buy German sovereign bonds amounting to around €10 billion ($11.4 billion) monthly, as part of the European Central Bank’s quantitative-easing program starting in March, a… Continue reading Germany’s QE
Comment As the table above shows (as well as WIRP <Go> on Bloomberg), the market is pricing in the first rate hike to 0.50% in September (blue). Prior to last Friday’s payroll report the markets were pricing in the first hike in December. The second rate hike to 0.75% is priced in for January 2016.… Continue reading When Will The Fed Hike?
The Financial Times – Investors must keep on second guessing the Fed The easy money offered by central banks is not without dangers, writes Henny Sender The February 6 edition of Citigroup’s high yield weekly newsletter posed a question that seemed to summarise the predicament of all fund managers, and not just those navigating the… Continue reading Talking About The Fed
The Economist – Buttonwood: The sky’s the limit Commercial property has been delivering excellent returns According to Real Capital Analytics, an information provider, Europe saw €213 billion ($241 billion) of commercial-property transactions last year, up by 13% from 2013 and the highest annual total since 2007. The number of transactions more than doubled in Spain… Continue reading Commercial Real Estate
The Telegraph (UK) – Ambrose Evans-Pritchard: Sweden cuts rates below zero as global currency wars spread Morgan Stanley warns that the world is revisiting the “ghosts of the 1930s” as one country after another tries to steal a march on others by devaluing first Sweden has cut interest rates below zero and launched quantitative easing to… Continue reading More Negative Rates