The Wall Street Journal – James Mackintosh: Shares Are Wildly Overpriced. But Bonds May Be Even Worse Bond yields are on the rise again, and it’s making shareholders jittery. They are right to worry, as low yields are the main support for historically high stock valuations, but bonds aren’t creating serious trouble for the equity market… Continue reading The Bond Market
The Federal Reserve Bank of New York – William Dudley: The Outlook for the U.S. Economy in 2018 and Beyond To sum up, I am optimistic about the near-term economic outlook and the likelihood that the FOMC will be able to make progress this year in pushing inflation up toward its 2 percent objective. The economy… Continue reading New York Fed President Bill Dudley Discusses The Economy
The Wall Street Journal – A Place Where Stocks Still Have Reason to Rally The breadth of the global economic growth pickup is lifting even longstanding laggards. European stocks are a case in point—but the potential for catch-up remains appealing. Even as U.S. stock indexes have set record high after record high, Europe has missed out. A… Continue reading Finding Value In European Stocks
The Financial Times – ECB joins central bank chorus hinting at faster tightening The European Central Bank has indicated it is preparing to cut its crisis-era stimulus programme faster than anticipated, joining monetary policymakers in most developed economies in expressing increased confidence in the global economic recovery. The signal, contained in minutes of the ECB’s December… Continue reading The ECB Hints At Faster Tightening
The Economist – Investment banks’ cull of company analysts brings dangers THEY are not extinct, nor even on the endangered-species list. But company analysts, once among the most prestigious professionals in the stockmarket, are being culled. New European rules, with the catchy name of MiFID2, have just dealt analysts another blow. A study by Greenwich Associates… Continue reading More On MiFID2
The Economists – Why commodity prices are surging The strong performance of the global economy finally has an impact But in the longer term, prices may weaken. After all, oil prices have only risen above $60/barrel thanks to OPEC’s emergency production-cutting measures. When the agreement ends at the end of the year, and the cartel’s members… Continue reading Rising Commodity Prices
Bloomberg Markets – Is This a Market Melt-Up? Hang On as We Find Out: QuickTake Q&A What does melt-up mean? You won’t find it in a dictionary. It’s a term traders use to describe a specific market event: a rapidly accelerating rally driven purely by sentiment. That is, market optimism has come untethered from fundamentals, and… Continue reading Is This A Stock Market Melt-up?
The Economist – Bitcoin is no longer the only game in crypto-currency town First on the list, after bitcoin, was Ethereum, whose coin, called ether, reached a market capitalisation of $137bn. Ethereum’s claim to fame is that it is also a platform for “smart contracts”—business rules encapsulated in software. Most ICO tokens, for instance, are issued… Continue reading Crypto Talk
Today at 9:00 AM CT (10:00 AM ET, 7:00 AM PT and 15:00 GMT) Bianco Research, in conjunction with Arbor Research & Trading, will be hosting a webinar/teleconference moderated by Jim Bianco. Join us today as we discuss three interrelated issues that will help determine where the markets are heading in 2018. Will inflation return? What… Continue reading Conference Call Today – Inflation, The Yield Curve and Earnings
Inflation expectations and equity risk as defined by the VIX have lost their negative correlation
Comment The longest risk-on cycle on record continues. After a near miss over year-end, the global flows index we use to define risk-on and risk-off periods has moved back in favor of risk-on flows. The chart below shows the BofA Merrill Lynch Global Flows index (top panel) and the cycles (bottom panel). The present risk-on… Continue reading Beat Goes On for Risk-On Cycle