The Fed has really been struggling with the meaning of the flattening yield curve. Some argue it means nothing, others argue it means a great deal. Powell took the middle ground and gave an incomplete answer, which is unusual for the plain-spoken chairman. The Fed wants to raise rates and the flattening yield curve has become an "inconvenient fact" to deal with.
Corker is right, Fed watching has moved from the endangered species list to extinct with the ascension of Powell. The Fed's uncertainty over the path of the economy and rates is ultra-low, while outlooks have shifted away from the ultra-short-term to balanced. All in all, we might have more fun watching paint dry.
Small cap equities have delivered on both performance and diversification in the first half of 2018. The diversification benefits are especially attractive with the convergence in performance across domestic sectors.
In April and May, Putin made true on his promise to "diversify" away from the U.S. dollar. Russian holdings of U.S. Treasuries fell from $96 billion to just $15 billion over this period.
Today's topics include Federal Reserve communication, ETF disruption, the declining British pound, Bernanke on the yield curve, why AI is not replacing human managers just yet, Wall Street dark pools and sulfer.
Search trends show consumers beating the heat by hitting the road and the water this summer. The shift is already affecting performance in retail stocks and commercial real estate.
Eurozone economic data is due to rebound given a rebound in beats. Important search trends (Google) in Germany have slowed, but remain positive. The risk of a summer 2019 hike by the ECB is growing.
Despite the constant hyperventilation on cable news channels regarding tariffs, companies are pointing to the dollar as the main headwind to earnings.
Today's topics include a look back at the financial crisis, Larry Fink on cryptos, the yield curve, crude oil, ETF flows, Chinese GDP, trade wars, Jeff Bezos and the labor market.
The large gap in University of Michigan inflation expectations survey between youth and middle-aged respondents suggests the Atlanta Fed’s flexible CPI will moderate in the months ahead. However, the sticky CPI components remain in an uptrend given above-average economic data changes and positive search trends for both discretionary and non-discretionary items. Those looking to sell TIPS will likely find a golden opportunity later this summer.