Bloomberg.com – Draghi May Again Find Bazooka Words Beat Action With QE Mario Draghi is once again testing whether words can replace action. Since the European Central Bank president said last week that policy makers will use “all the available instruments needed to ensure price stability” and are “ready to adjust the policy stance further,”… Continue reading Analyzing Draghi’s Choice Of Words
Naples Daily News – Out-of-state contributions spike in Florida governor’s race On May 24, Los Angeles was good to Charlie Crist’s gubernatorial campaign. On that day, the former Republican governor and his committees picked up a quick $24,000 in campaign contributions, including $6,000 from legendary director Steven Spielberg. Crist has snagged more than $100,000 from… Continue reading The Race For Governors
The Financial Times – Mohamed El-Erian: Rising risk of currency market volatility FX instability will spread as policy divergence widens The biggest threat to the portfolios and peace of mind of investors may not be the stretched prices of equity and bond markets bolstered by hyperactive central banks. Instead it may come from a foreign… Continue reading Risk In The Currency Markets
Comment Now that 486 of the S&P 500 companies have reported earnings, we know that roughly 68% beat their earnings estimates. This can be seen in the chart below. The second chart shows the growth rate of earnings. Analysts will now begin to focus their attention on next quarter’s earnings season, both offering and revising… Continue reading One Final Q2 Earnings Season Update
The Wall Street Journal – Fed’s Yellen Remains Mum on Timing of Rate Change Janet Yellen delivered a cliffhanger in the mountains of Wyoming. Encouraged by progress in the U.S. labor market, but uncertain if it is enough, the Federal Reserve Board chairwoman and other officials who gathered here for a central-bank conference left the… Continue reading Timing The First Rate Hike
The Financial Times – No need to panic about high-yield bonds Keep calm and carry on has characterised the market for high-yield bonds despite a recent bout of intensive selling by retail investors. Policy makers and commentators had warned that the growth of the corporate bond market, coupled with a structural decline in market liquidity,… Continue reading High Yield Bond Market Liquidity
<Click on chart for larger image> Bloomberg.com – Your Weekend Reading on the CAPE Today, I want to focus on the pros and cons of CAPE, giving airtime to all sides of the argument. My main interest in CAPE has more to do with behavioral issues such as confirmation bias by those who cherry pick… Continue reading Cyclically Adjusted Price To Earnings Ratio
<Click on chart for larger image> Bloomberg.com – Bullard Sees ’Several Hundred Billion’ of Reverse Repos The Federal Reserve will probably borrow “several hundred billion” dollars from money-market mutual funds and others to anchor the federal funds rate when it begins tightening policy, according to St. Louis Fed President James Bullard. “I don’t think it… Continue reading Sizing Up The Fed’s Reverse Repo Facility
<Click on chart for larger image> MoneyBeat (WSJ Blog) – The Decline and Fall of Fund Managers Active fund management is outmoded, and a lot of stock pickers are going to have to find something else to do for a living. The debate about whether you should hire an “active” fund manager who tries to… Continue reading Active Fund Management
Bloomberg.com – Draghi Pushes ECB Closer to QE as Deflation Risks Rise Mario Draghi just pushed the European Central Bank closer to quantitative easing. With euro-area data this week likely to show the weakest inflation since 2009, the ECB president used the high-powered central-banking conference in Jackson Hole, Wyoming, to warn that investor bets on… Continue reading The ECB Eyes Asset Purchases
MoneyBeat (WSJ Blog) – The ‘Investor’s Dilemma’: Everything Is Expensive U.S. stocks are hitting records. So are India’s and Argentina’s. U.S. junk-bond prices are high and rising. And it isn’t just risky investments that are up: So are the prices of conservative U.S. Treasury bonds. “That is the investor’s dilemma right now, looking for something… Continue reading In Search Of Cheap Assets