The Financial Times – Mester under consideration for Federal Reserve vice-chair Cleveland Fed president is among the economists in running to serve under Jay Powell The White House is considering appointing Loretta Mester, president of the Federal Reserve Bank of Cleveland, as vice-chair of the US Federal Reserve’s board of governors. One person familiar with the… Continue reading New Name In The Fed Vice-Chair Derby
Reuters – Physical oil market sends warning to OPEC: Rout might not be over As OPEC watches a near 15 percent drop in the oil price in three weeks, important indicators in the physical crude market are flashing signals that the decline might be far from over. The warnings come not from the heavily traded futures market,… Continue reading Oil Decline To Continue?
The Financial Times – Tensions over junk bond covenants start to boil over Asset managers worry safeguards are being eroded, leaving them more exposed to losses Today the quality of these covenants in a market tapped by the likes of French telecoms conglomerate Altice and UK sports car maker Aston Martin is even worse. Asset managers… Continue reading Bond Covenants
Be cautious of studies looking at the relationship between stocks and bonds using short timelines. While deflationary fears have dominated since 2000, this relationship is fluid over long periods.
Bloomberg – UBS, JPMorgan Validated as Emerging Markets Are Havens Amid Rout Selloff was mostly in Asia, losses much smaller elsewhere JPMorgan’s Diana Amoa said it wasn’t a taper tantrum, while UBS’s Geoffrey Wong dismissed the selloff as a mere blip, predicting a quick rebound. Others, like Ashmore Group Plc’s Edward Evans, insisted emerging markets were… Continue reading Emerging Markets and Commodities Reconnect
Wall Street Journal – OPEC Revises Crude Supply Forecasts on Higher U.S. Production Traders have grown increasingly concerned that burgeoning U.S. production could once again flood the market Booming U.S. shale production forced the OPEC oil cartel to raise its crude supply forecasts for this year but it said strengthening global demand would continue to help… Continue reading IEA Says Oil Supply Set to Outpace Demand in 2018
Bloomberg – U.S. Small-Business Optimism Jumps as Expansion Plans Hit Record Six of the 10 components that make up the small-business optimism index increased in January, producing one of the strongest readings in the 45-year history of the survey. The figures show sustained, sturdy business sentiment since the November 2016 election. A measure of plans to… Continue reading Small Business Sentiment as Good as it Gets
The Wall Street Journal – The Next Big Number Keeping Markets on Edge So many got inflation wrong for so long, that getting it right is its own form of surprise Throughout last year, investors worried about a phantom menace that could upset markets: higher U.S. inflation. They were wrong, to their own pleasant surprise. Now… Continue reading This Week’s Inflation Report
Bloomberg.com – Americans Expect Biggest Pay Jump in Years New York Fed survey results jibe with jobs report wage gauge Americans are more optimistic about wage growth than they have been in years. U.S. consumers anticipate earnings will rise 2.73 percent in the coming year, the most since data collection began in 2013, according to the results of… Continue reading Wage Inflation
The Financial Times – Lena Komileva: Why volatility is here to stay Central bankers’ hands are tied in responding to ructions in financial markets The outlook from here is an uneasy choice between a seeming recovery in equities, leading to overheating and another crash, or another sharp fall before investor confidence returns. Last week’s comments from… Continue reading Volatility Is Back, Get Used To It
The Wall Street Journal – Does Private Equity Really Beat the Stock Market? Most likely, yes, but it is really hard to measure and comes with big caveats The above chart shows a comparison method that looks nice and simple—it is like calculating the value of $100 invested in a theoretical average private-equity fund over time… Continue reading Private Equity Beats Public