Bloomberg – Record $23 Billion Flees World’s Largest ETF Investors actively abandoned the world’s biggest passive fund during the onset of market mayhem. The SPDR S&P 500 exchange-traded fund (ticker SPY) suffered a record $23.6 billion in outflows last week amid the worst momentum swing in history for the underlying U.S. equity benchmark. Outflows amounted to… Continue reading A Look At SPY Outflows
Barrons – Randall W. Forsyth: The Real Cause of Stocks’ Big Stumble We are witnessing the beginning of the end of the radical monetary policies that brought interest rates down to zero—and in some cases, below zero—and flooded the global financial system with excess liquidity. That has resulted in the inflation of asset values and… Continue reading The End Of QE
The Financial Times – Wall St blames turmoil on insurers’ volatility strategy Wall Street is pointing the finger at insurance companies as an unlikely but pivotal source of the turbulence that wiped trillions of dollars off stock market values in recent days. While complex volatility-linked funds and algorithmic traders have been widely blamed for the… Continue reading Playing The Volatility Blame Game
Energy has continued to lead a high yield retreat with the subindustries most exposed to spot prices underperforming.
The Financial Times – Fast-growing mutual fund is victim of market turbulence LJM Preservation and Growth Fund had attracted $800m but lost 80% in two days The fund is overseen by Anish Parvataneni, who joined LJM in 2010 having previously spent time at proprietary trading firms Citadel and Jump Trading. Its fees make the Preservation and… Continue reading Fallout from the VIX Spike Concentrated on Only a Few Mutual Funds
OPEN Webcast: Understanding The Role Of Short Volatility Strategies In This Week’s Selloff In the webcast above, Jim Bianco discusses the role of short volatility strategies in this week’s selloff.
CNBC – US 10-year Treasury yield nears 4-year high as investors bet on accelerating economy “What the market is worried about is not that we’re going to get inflation, it’s that it’s going to get enough of it that we’re going to have to reverse the central bank easing that we’ve had over the last 10… Continue reading Talking Markets
Comment The chart below shows four scenarios run through a model trained on inflation, economic growth (hard/soft data), global balance sheet growth, and rate hike timing across the Fed, ECB, and BoE since 2006. Projections are produced for the next three months. The scenarios with both realized inflation and TIPS breakevens retreating produce the best… Continue reading Inflation and Central Bank Response in Chart of the S&P 500’s Drawdown Depth
The Financial Times – The ‘buy the dip’ mantra faces unexpected test US stock volatility’s return poses a challenge for investors used to buying any pullback “The [equity] market is adjusting to a tighter labour market, some modest pick-up in wages [and] a Federal Reserve that is likely to be tighter,’’ says Brian Levitt, senior investment… Continue reading Buy The Dip?
The Financial Times – Merryn Somerset Webb: Get used to market volatility — it’s here to stay The stability of markets over the past eight years or so — what has made being short volatility so lucrative — has been in large part driven by the understanding that they will be constantly supported by central… Continue reading Is Volatility Here To Stay?
The Financial Times – US leads record $30.6bn outflow from global stock funds Weekly figures show pullouts in US, Europe and Asia offset by emerging market inflows Investors yanked a record $30.6bn from global equities funds this week, with the US facing particularly heavy withdrawals amid an intense bout of volatility on Wall Street. Outflows from… Continue reading Record Outflows From Stock Funds