The Financial Post – David Rosenberg: Why the elephant in the room is monetary policy not fiscal stimulus Monetary policy has a far more powerful influence on the business and market cycle because the Fed, through its control over the monetary base, has the power to determine liquidity growth. And it is shifts in liquidity,… Continue reading Weighing Tax Cuts Against Tighter Monetary Policy
The U.S. economy is ending 2017 on a high note with a tremendous streak of data surprises and improving realized data changes.
Bloomberg – Copper’s Rally Is Longest in a Generation Metal tops $7,300 a ton on LME as price advances for 10th day “It is the Chinese demand which is driving the copper price crazy,” said Naeem Aslam, the chief market analyst at Think Markets U.K. “We expect this bullish sentiment to continue into 2018 on the… Continue reading Swings in Copper Won’t Change Growth Reality
The Wall Street Journal – Greg Ip: A Tech-Driven Boom Is Coming; Please Be Patient What about AI? Banks first used machine learning—a type of artificial intelligence that spots patterns in massive data sets—to spot credit-card fraud in 1987. But to gain widespread acceptance first computing power had to get a lot cheaper, datasets… Continue reading What’s Holding Back Productivity?
Bloomberg Business – Betting Against Boredom: A Field Guide to 2018 Volatility Trades Volatility has been below 10 about 20% of the time this year It’s pretty simple: in three decades since the Cboe Volatility Index was invented, 2017 will go down as the least exciting year for stocks on record. There are three trading days… Continue reading Will Volatility Return In 2018?
Bloomberg Business – The U.S. Inflation Mystery Made Economists Look Bad in 2017 Economists missed both unemployment and prices to the upside A year ago, Bloomberg asked economists to predict how 2017 would unfurl. With the year almost over, we compared those forecasts to actual performance and, well, the results weren’t pretty. This was the year that… Continue reading Economists Missed the Mark on Inflation in 2017
Bloomberg Business – Dollar Touches 1-Month Low as It Heads for Worst Year Since 2003 The dollar reached its lowest level in a month versus the euro on Thursday as an earlier slide in Treasury yields and year-end rebalancing flows weighed on the currency that’s heading for its worst year in more than a decade. The… Continue reading The Dollar Has A Bad Year
Investing.com – Tim Duy: Five Questions Fed Policy Makers Must Answer in 2018 Should the Fed care about inverting the yield curve? Despite the inverted yield curve’s record of predicting recessions, traditionally the Fed has been wary of reading too much into the yield curve. But some policy makers, such as reserve bank presidents Neel Kashkari and Robert Kaplan,… Continue reading Questions The Fed Must Answer in 2018
Bloomberg View – Justin Fox: Tax Bill Will Deliver a Corporate Earnings Gusher You may have already heard about the negative numbers: Financial institutions and other companies that had near-death experiences during the financial crisis are going to have to take big charges against earnings as the value of their “deferred tax assets” — past losses that… Continue reading Corporate Earnings And the New Tax Bill
The Financial Times – Michael Hasenstab: Fed risks massive hangover as it begins ‘great unwind’ Only a strong economy can stop damage in Treasuries spreading to equities and credit By artificially suppressing yields, the price of money, along with key metrics for valuing both financial and real investments, have been distorted. Many asset valuations are… Continue reading The Fed’s Great Unwind
The Financial Times – Global M&A exceeds $3tn for fourth straight year US maintains its position as most active region, with $1.4tn of deals Worldwide mergers and acquisitions activity has exceeded $3tn for the fourth consecutive year, extending an unprecedented wave of dealmaking that bankers say is set to accelerate in 2018. The final month of… Continue reading Global M&A Has Another Great Year