China has shed roughly $71 billion of U.S. Treasury securities since the first tariffs were implemented in early 2018. Over the same span, Japan has purchased an additional $86 billion in Treasuries.
Today's topics include passing on negative rates to deposits, negative real yields, the search for safe assets, privatizing Fannie and Freddie, the return of the hedge fund, Trump's meeting with Powell, the Fed's pause, growth/momentum vs. value, tracking the trade war, the FOMO rally and a long-term history of interest rates.
Bond yields and stock prices recently broken out higher, in part due to hopes of better economic data. So far, this economic improvement has yet to materialize.
Q3 2019 earnings season is over 92% complete and it’s looking like it will be a negative growth quarter. Q4 is now forecasting negative growth, setting up the potential for an earnings recession.
Today's topics include the latest in Hong Kong, the stock market vs. the economy, the largest stocks continue to grow, bond portfolio trading, short selling junk bond ETFs, active managers' struggles, negative-yielding debt's effect on the economy, weak wage growth, rents and Saudi Aramco's valuation.
The most recent S&P Indices Versus Active (SPIVA) scorecard continues to paint a picture of active managers struggling to beat their benchmark indices.
Today's topics include Kudlow on a China deal, the risk-on rally, liquidity concerns in bonds funds, the Fed's repo operations, alternative recession signals, global debt on the rise, China's economy, central banks' balance sheets and an impeachment update.
A replay of our November 14, 2019 conference call
In yesterday's testimony, Chairman Powell proclaimed the repo market is under control. The effective funds rate is trading even with IOER for the first time in many months. However, this is all due to the Fed's heavy involvement via repo operations and T-bill purchases. This market will remain under control so long as the Fed controls it.