The Financial Times – Bund yields hit 1% after Germany contracts The 10-year German Bund yield fell 2bp to 1.01 per cent, having earlier hit 1.0 per cent for the first time, while Berlin’s two-year implied borrowing cost sits at minus 1 basis point, reflecting expectations that the European Central Bank will have to adopt… Continue reading German 10-Year Bond Yield Falls Below 1%
The Financial Times – Eurozone economy fails to grow in second quarter The eurozone’s economic recovery has shuddered to a halt, bolstering calls for the European Central Bank to take extraordinary measures to lift growth and stop the currency bloc’s slide towards deflation. Gross domestic product was flat between April and June, compared with growth… Continue reading Lack Of Growth In Europe
The Financial Times – Wall Street bulls climb wall of worry The resilience of US equities continues, so far sparing the longstanding bull run from a showdown with the matador.A rally that has lasted well into six years, through geopolitical flare-ups across the globe, makes investors legitimately nervous. For all the angst, though, US stocks… Continue reading Bulls Worry About Geopolitics
The Economist – Fingers crossed A sudden, sharp contraction may be more than a blip The Bank of Japan has pumped billions of dollars into the economy to buy up government debt, which has driven the yen down against the dollar. Yet exports have been sluggish; the main impact of the cheaper yen seems to… Continue reading Japan’s Economy
<Click on chart for larger image> Zero Hedge – World Reserve Currencies: What Happened During Previous Periods Of Transition? The transition process of the world reserve currency brings much uncertainty Throughout history, a transition of the reserve currencies has always brought about turmoil and uncertainty in financial markets. One country’s decline, and the subsequent rise… Continue reading Currency Reserves
<Click on chart for larger image> Bloomberg Businessweek – Bonds Beat Stocks Worldwide in Past Month on Demand for Safety Bonds trounced stocks worldwide over the past month as investors sought safety amid unrest in Ukraine and the Middle East and uneven economic growth. As yields slide, money managers are saying debt is too expensive.… Continue reading Stocks v Bonds
The Wall Street Journal – HILSENRATH’s TAKE: YELLEN TO TURN TO LABOR MARKETS IN JACKSON HOLE The Federal Reserve confirmed that Chairwoman Janet Yellen will speak at next week’s Jackson Hole forum for global central bankers. The WSJ has previously reported she is attending, but the Fed hadn’t until now confirmed she will speak. Ben… Continue reading Yellen Focusing On The Labor Markets
BeSpoke – Most Heavily Shorted Stocks Outperform Short interest figures for the end of July were released after the close yesterday, and we just sent our regular update of trends in short interest to clients. One table from the report is shown below and it lists the 25 stocks in the S&P 1500 that have… Continue reading Shorted Stocks Outperform
Business Insider – EL-ERIAN: The ‘Bad News Is Good News’ Trade Has Limits With equity markets continuing to bet that bad economic news is in fact good news – a strategy that has worked very well in this period of hyper-active central banks – investors should also not lose sight of two important qualifications: valuations… Continue reading When Bad News Is Good News
The Wall Street Journal – Justin Lahart: Stocks Could Ignore Rate-Rise History Lesson When the Federal Reserve raised rates in 1994, the stock market endured little more than a glancing blow. When the rate cycle eventually turns this time around, investors may not be so lucky. With the job market looking stronger, economists have been… Continue reading Rising Rates and The Stock Market
Seeking Alpha – Michael Pento: Why The Federal Reserve Will Never Be Able To Get Out Of QE In the middle of July the stock market finally awoke from its QE-induced coma and realized the Federal Reserve’s tapering, which has been going on for the last six months, was for real. Like a child, who… Continue reading Never Ending QE
Bloomberg.com – Matt Levine: Argentina Defaulted on Bonds No One Can Even Find Here’s a strange little quirk about the fallout from Argentina’s continuing debt troubles. After Argentina defaulted at the end of last month, the International Swaps and Derivatives Association declared a credit event, triggering the credit default swaps on those bonds. And the… Continue reading Argentina’s Bond Default