Comment Consider yourself warned!! USA Today – Record Dow sparked by home prices, consumer confidence Just when it looked like the bull market was stalling, the Dow hit a fresh record high Tuesday, powered by some good news on home prices and consumer confidence. People are having trouble understanding why the market is going up… Continue reading Cover For Contrarians
As the first chart below shows, the 10-year yield is soaring. Earlier this morning the 10-year yield reached 2.23%, the highest level in over a year. <Click on chat for larger image> Comment Most people assume that whenever bond yields rise that “the economy is getting better” before looking at the data. Indeed that is… Continue reading Why Are Treasuries Tanking?
NBC News – (May 19) Big reason for stock boom? Companies buying back stocks It’s the narcissist rally. Sure, there are plenty of forces pushing stocks higher — record corporate earnings, small investors finally buying again, signs the U.S. economy may be strengthening, central banks flooding the financial system with money. But you may want… Continue reading Stock Buybacks Boosting EPS (But Not Net Income)
<Click on chart for larger image> <Click on chart for larger image> <Click on chart for larger image> <Click on chart for larger image> The Wall Street Journal – Home Prices Jump 10.9%, Largest Annual Gain in 7 Years Home prices in March rose by 10.9% from a year earlier, the largest such gain in… Continue reading Home Prices Rise
The Financial Times – US housing lift could crimp Fed buying The largest rise in house prices for seven years and a surge in consumer confidence have added to a fast-improving US economic outlook, increasing the chances the Federal Reserve will slow its $85bn-a-month in asset purchases. House prices jumped 10.9 per cent in March… Continue reading Is The Rise In Home Prices Going To End QE?
Real Time Economics – Kansas City Fed Wanted to Raise Discount Rate Federal Reserve officials said they view the pace of economic expansion as “moderate” and voted to maintain its primary credit rate. The Fed’s Board of Governors kept its primary discount rate at 0.75%, according to minutes from meetings on April 8 and April… Continue reading Differing Views Of The Economy At The Federal Reserve
CarmenReinhart.com – Dear Paul:Letter to PK Back in the late 1980s, you helped shape the concept of an emerging market debt overhang. The financial crisis has laid bare the fact that the dividing line between emerging markets and advanced countries is not as crisp as once thought. Indeed, this is a recurring theme of our… Continue reading Reinhart & Rogoff Write Paul Krugman A Letter
MarketWatch.com – 4 ways the end of QE will surprise everyone Commentary: End of central bank buying could benefit most markets It didn’t take much to bring the bull market of 2013 to a juddering halt. Just a few words were enough. In testimony last week, Federal Reserve Chairman Ben Bernanke hinted that the program… Continue reading Will The End Of QE Be A Good Thing For The Markets?
The New York Times – Central Banks Act With a New Boldness to Revitalize Economies The Federal Reserve in the United States has been significantly more aggressive since December 2008, when the Fed reduced its benchmark short-term interest rate nearly to zero. Ever since, it has pursued a pair of experiments aimed at dragging other… Continue reading Central Bank Praise
Bloomberg Businessweek – Europe’s Banks Turn to U.S. Subprime for Salvation The U.S. mortgage bonds that were exported around the globe and triggered the worst financial crisis since the Great Depression are now helping Europe’s banks and governments repair balance sheets after jumping in value. Lloyds Banking Group Plc (LLOY), Britain’s biggest mortgage lender, is… Continue reading Europe
The Financial Times – Japan’s bumpy road to a recovery Abe’s economic nationalism may clash with that of China Japan’s effort to get its economy moving entered difficult terrain last week. Bond yields rose and stock prices fell. Some promptly declared “Abenomics” – the reforms launched by prime minister Shinzo Abe – a failure. This… Continue reading Japan
The Financial Times – Unprecedented demand for debt of companies in emerging markets As a result of strong demand, emerging market corporate bond yields have reached fresh lows of just over 4 per cent, down from 5.3 per cent early last year, according to the JPMorgan Corporate CEMBI High Grade index. With debt relatively cheap,… Continue reading Emerging Market Corporate Debt