For quite a few years now, the high yield market has been driven by macro trading from options and ETFs. Maybe it is now returning to a market of high yield bonds in which credit is differentiated by issuers. Weaning this market off its macro dominance would be a positive development as it makes capital allocation much more efficient.
Today's topics include will stimulus have a consequence?, understanding the bond market's selloff, Judy Shelton on bank lending, EU debt servicing costs, the OECD raises global growth forecasts, retail traders' rise, the value rotation, a keen eye on this week's Treasury auctions, more on the move away from LIBOR, and the effect of Tesla's inclusion in the S&P 500
While the rapid rise in 10-year yields might be suggestive of a massive short in the Treasury market, an analysis of the data shows this is not really the case.
While the Fed continues to suggest the first rate hike won't occur until 2023 or later, the market is beginning to price in a hike as early as mid-2022.
Today's topics include how far can rates rise?, financials outperform tech, global growth, gauging inflationary risks, an explosion in new business formation, value stocks' revival, comparing bond yields to dividend yields, Goldman sees a 4.1% unemployment rate by year-end, and checking in on the world's richest
It is often said a trend in bond yields continues until something breaks or the Fed is forced to change. To date, nothing has broken, but cracks are beginning to appear.
Despite almost 900k people missing work due to inclement weather in February, the payrolls report still managed to beat almost all analysts' estimates.
Today's topics include on the next aid bill, Buffett warns on bonds, Powell's one-word' power, expecting M&A boom, doubling US debt by 2060, hedge funds are cashing in on the 'R' trade, Credit Suisse drops failing fund, Chinese focus on natural gas, do financial bubbles lead to production growth?, and the EV bubble
Today's topics include inflationary regime changes, gauging a true unemployment number, previewing Powell's presser, retail traders in Asia, the case for junk bonds, investing in the Bank of Japan, the U.S. dollar, and your daily dose of Ark