Most who follow the Treasury's International Capital report are aware that China and Japan are easily the largest holders of U.S. Treasuries. However, the Euro Area is quickly gaining on them.
The Fed was laughing all the way into the crisis. When the crisis hit in 2008 and things got serious, laughs at the FOMC meetings all but disappeared.
Correctly timing a credit and coinciding stock market blow-up is essentially an impossibility. We do see indicators beginning to flash red, but the traditional cycle between high yield OAS versus the yield curve has yet to fully play out. Additionally, slowing global economic data has not yet truly deteriorated. We identify three key items as the likely recipe needed to produce appreciable high yield losses.
The accelerating decline in search interest for borrowing and banking is a potential threat to the pace of economic growth in the U.S.
While Chinese capital is still leaving the country, government regulations have helped stem the outflows.
Today's topics include the yield curve, hyperinflation in Venezuela, Italian debt, two-year Treasuries, Trump and the Fed, Trump and the Treasury Department, EM debt, darts vs money managers, the ruble, business optimism and the possibility of Amazon disrupting asset management.
The U.S. real yield curve has inverted, but is expected to converge (i.e. steepen) back in line with the nominal. Short-end real yields will be weighed down by the likely weakening in flexible prices. On the flip side, longer-end yields will remain stable to higher given strengthening sticky prices.
88% of companies beat earnings expectations so far this quarter. Don't expect that to be enough to propel stocks higher on its own.
Latin America remains positioned to outperform among emerging market economies but Brazil faces significant headwinds as it heads toward an October election.
Today's topics include Trump & the Fed, JGB yields, a change in global central bank policy, gold bearishness, trade wars, caution in emerging market bonds, bitcoin and more on earnings season.