Bloomberg – This ETF Is Flashing a Buy Sign for Emerging-Market Dollar Bonds Call it a hate-love relationship. Investors are piling into the biggest proxy for emerging-market hard currency bonds, barely a month after they were spooked into a selloff by the strengthening dollar. The iShares J.P. Morgan USD Emerging Markets Bond ETF, or EMB, took in… Continue reading Break in the Clouds May Not Last for Emerging Markets
The Federal Reserve is convinced inflation is returning. Unfortunately this belief is based on surveys with a spotty track record.
Today's topics include the 10-year rising above 3%, capital spending, Fed officials commenting on the yield curve, Thomson Reuters relocates, OPEC production cuts, what higher oil means for the economy, smaller hedge funds outperform larger funds and cryptocurrency payments.
Choppy equity markets are being produced by a battle between two major storylines: "synchronized global growth" and fear this is "as good as it gets." We have previously shown synchronized growth has already ended, therefore the onus is on a rebound in fading economic data changes. Equity markets can no longer be so reliant on the stories of late 2017 and early 2018.
Search traffic and negative economic surprises show weakening consumer demand. High gas prices driven by global oil supply concerns may take a bite out of the rest of the retail sector.
Consumer search trends are seeing an unfavorable shift in contrast to still sky-high sentiment found within traditional surveys. U.S. 10-year yields have historically struggled to rise under depressing consumer trends. Additionally, TIPS underperform, meaning TIPS breakevens should face headwinds. Remember, TIPS breakevens have been steering Federal Reserve policy in 2017 and 2018.
Now that over 90% of companies have reported first quarter earnings, we offer a look at the state of corporate earnings.
A look at the CoT report from May 11, 2018.
Today's topics include GDP-linked bonds, stock buybacks, emerging market bonds, crude oil's march higher, populism in Italy, hedge fund boot camp, computers taking on the commodities markets and Blythe Masters.
The Treasury curve flattened to its lowest levels in over a decade after another realized inflation miss. We see no relief in sight from the flattening trend.