Q3 2019 earnings season is over 95% complete and it's now assured to be a negative growth quarter. Q4 is also forecasting negative growth, setting up the potential for an earnings recession.
Today's topics include Hong Kong's message to Beijing, the latest on the trade war, banks jump at the opportunity for 2020 term repo, the stock picker's environment, low-rated credit risk, Germany avoids recession, an impeachment update, Michael Bloomberg launches presidential bid, economic releases vs. central bank stimulus, capital investment, job quality vs. job quantity, emerging market debt, natural language processing in investment, all quiet on the currency front, Loomis Sayles's bond fund and measuring central banks' independence.
Those waiting for reflation to spur inflation and lead to a fall in the dollar have been frustrated and losing money for years. The problem is they are waiting for a return of the 1980s/early 1990s. That era is over with the adoption of technology that has fundamentally changed how businesses operate.
The impeachment hearings ended and Congress is on recess until early December. Polls show waning support for impeachment, while betting markets continue to expect an impeachment without Trump actually being removed from office.
In the wake of Wednesday's Democrat debate, the betting markets show Pete Buttigieg's odds continue to surge. According to bettors, he continues to lead in the Iowa and New Hampshire primaries and has passed Joe Biden into second place for the overall nomination.
Today's topics include pricing bonds in a negative rate environment, mid-December's tariff deadline, the rise of Chinese exports since 2000, fiscal vs. monetary policy, personal loan growth, the CME prepares for life after LIBOR, quants versus stock pickers and Judy Shelton on central bank independence.
Banks are increasingly relying on deposits as a source of funding.
Core sticky CPI recently hit its highest level since November 2008.
Traders had the fortitude to remain short during bouts of volatility in the QE era. Without the Fed reducing its balance sheet, they appear to be emboldened once again in shorting volatility.
As another earnings season comes to a close, companies have once again successfully guided analysts' expectations low enough to ensure positive results. This is a game that has been perfected over the past decade.
As equities have rallied in 2019, traders have been afforded a better stock picking environment.