The Financial Times – US ‘too big to fail’ regime set for Trump overhaul The Trump administration is proposing to recast a central pillar of post-crisis financial regulation with a new “Chapter 14” bankruptcy process designed to eliminate the risk that taxpayers will have to pick up the cost of a bank failure. The Treasury,… Continue reading Trump Attempts To Tackle “Too Big To Fail”
Bloomberg – China’s VIX Goes Dark as Government Clamps Down on Options China stopped updating its homegrown version of the VIX Index, taking another step to discourage speculation in equity-linked options after authorities tightened trading restrictions last week. State-run China Securities Index Co. didn’t publish a value for the SSE 50 ETF Volatility Index on its… Continue reading Chinese Government Stops Updating Its Volatility Measure
The Wall Street Journal – Amazon Is Taking Over the Stock Market, Too Three technology titans have powered nearly half of the S&P 500’s advance this year, a worrying sign for investors expecting a strengthening economy to lift shares of manufacturers, oil companies and other firms whose fortunes typically improve with growth. Amazon.com Inc. has… Continue reading Amazon Still Drives The S&P 500
Given the volatility in the stock market over the past couple weeks, we expected the extreme levels of bullishness to subside some. The first chart below shows Investors Intelligence’s survey of stock newsletter writers with data through February 20. While the percentage of bullish respondents, shown in green, fell some, this group is still rather… Continue reading Stock Sentiment Takes A Hit, But Still Fairly Bullish
We prefer to watch inflation swap caps/floors over TIPS breakevens, which are more greatly impacted by risk and liquidity premiums. The odds below are simply the ratio between inflation swap caps (calls) and floors (puts) on headline CPI running above 2.5% year-over-year for 2 through 30-years. A ‘breakout’ is needed to signal the next leg… Continue reading Inflation Expectations Stuck Near Best Levels Seen Early 2017
Gold and gold miner ETFs saw a surge in net inflows last week as risk-off jitters and inflation data sent the precious metal back to its late January highs. Net inflows for gold and miner ETFs totaled $874 million last week and the funds saw another net inflow of $134 million on Tuesday.
Short interest in U.S. corporate bond ETFs crept higher last week even as credit markets rebounded. The chart below shows average short interest ratios for U.S. fixed income ETFs by subcategory. Pure investment grade and high yield corporate bond ETFs have the highest ratios, which are the total short interest divided by the average daily… Continue reading Heavy Short Interest in U.S. Corporate Bond ETFs
Last week the Treasury released its Treasury International Capital report for December 2017. As the blue bars in the chart below show, foreigners bought more U.S. equities in December than any month other than May 2007. This comes on the heels of rather strong purchases that started in September, pushing the 12-month rolling sum of… Continue reading Foreigners Piled Into U.S. Equities In December
As February nears a close, it is worth noting the months of March and April typically favor many risk assets over safe assets. As the first chart below shows, these two months have provided the highest returns on average since December 1979 for value stocks. The same can be said for crude oil. On the… Continue reading Entering A Seasonal Risk-On Period
Last week the Federal Reserve of New York released its quarterly report on household debt and credit. The interactive visualization below offers some of the more interesting charts from the update. Feel free to change timelines where offered and mouse over each chart for more detailed information.
The first two charts below offer an update of Trump’s approval rating. Statistician Nate Silver did an analysis of the generic Congressional poll and concluded that the Democrats need a 6% to 7% lead to take the House.