The Wall Street Journal – Shutdown’s Economic Hit Seen to Be Muted The federal government shutdown could sideline significant numbers of federal employees and leave government contractors out in the cold, but in a $19.5 trillion economy with 147 million workers, a shutdown, even a long one, isn’t expected to leave much imprint on the… Continue reading The Government Shutdown
U.S. Treasuries, TIPS, and municipal bonds are primed to outperform U.S. equities.
Summary On Wednesday we discussed some shifts in the composition of risk-on flows. Net inflows shifted toward industrials, energy and materials sectors and away from financials, technology, and healthcare. Here we look at how stronger evidence of rising manufacturing demand has driven total return performance in large cap U.S. equities and high yield. Comment The… Continue reading Improving Hard Data Shifted Risk Flows Toward Heavy Industry
Bloomberg – European Insurers Find Yield in U.S. Municipal Bond Market Higher credit quality than corporates fuels foreign interest The global hunt for yield is so vigorous that payments to protect against car losses, deaths and storms in Europe are helping to bankroll roads and utilities in the U.S. The $3.8 trillion municipal-bond market, long… Continue reading Demand Will Remain High for Municipal Bonds
USA Today – Why investors shouldn’t fear a potential government shutdown Talk of a partial government shutdown won’t put the nearly 9-year-old bull market on the endangered species list. The reason? The government has shuttered its doors for non-essential business 18 times since 1976 and the stock market never suffered a big drop despite all the… Continue reading Stocks Ignore The Looming Government Shutdown
The Financial Times – John Authers: US stock market’s ‘animal spirits’ can resist bond bears Mr Trump’s greatest risk lies in another market record. As his first year ends, the yield on 10-year Treasury bonds is at its highest for his presidency, and close to breaking a downward trend of more than three decades’ duration. He… Continue reading The U.S. 10-Year Yield Reaches Its Highest Level Since Trump Was Elected
Bloomberg Business – OPEC’s Casual Relationship With Hedge Funds OPEC has a complicated relationship with hedge funds. Historically, the oil exporters’ club routinely blamed “speculators” for moving oil prices too far this way or that relative to fundamental supply and demand. Let’s breeze past the irony of an organization artificially restricting supply bemoaning others for interfering with the… Continue reading Hedge Funds Long Over One Billion Barrels Of Crude Oil
Bloomberg View – Danielle DiMartino Booth: The Fed Is Targeting the Wrong Inflation “An increase in consumer credit of $253 billion and an actual reduction in savings of $190 billion account for this difference,” Hunt and Hoisington wrote. “It is possible that the saving rate will continue to fall. A drop of the same magnitude in… Continue reading The Fed’s Inflation Target
The Wall Street Journal – U.S. Oil Output Expected to Surpass Saudi Arabia, Rivaling Russia for Top Spot OPEC and 10 producers outside the cartel, including Russia—which produced around 10.9 million barrels a day in 2017—agreed late last year to extend an agreement to hold back crude output by nearly 2% through the end of 2018. The… Continue reading U.S. Oil Output Expected To Rise Even More
Bloomberg Markets – Brandon Kochkodin: Why Is Volatility So Low? We checked in with seven experts, including a Nobel laureate. They cited ‘Minsky moments,’ chaos and crowded trades. Volatility was one of the never-ending talking points of 2017. Hardly a day went by without stories citing the almost eerie calm in U.S. stock markets. The Chicago… Continue reading Reasons For Low Volatility
Bloomberg Business – Strength Against the Dollar Isn’t Enough for the Pound The pound touched a new post-Brexit vote high against the dollar on Friday and investors are clamoring to go long, but analysts urge caution. While on the face of it the U.K. currency has seen a recovery, in reality it is more about the… Continue reading The British Pound Strengthens