Bloomberg – The Risk If Central Banks Get Trigger Happy in 2018 One big economic risk next year is that things go right. Wait, what? The danger is that 2017’s synchronized global expansion continues into 2018, and that central banks respond imprudently. One dominant theme as this year draws to a close is how monetary… Continue reading The Risk Of An Over-Aggressive Fed
The chart below shows the MSCI world stock market index in the top panel. The middle panel shows cumulative flows into open-ended mutual funds in blue and equity ETFs in red. The bottom panel shows the total assets of open-ended mutual funds in blue and equity ETFs in red. Flows into ETFs since 2001… Continue reading Monthly Fund Flows Update- Detailing Active And Passive Money Flows
MoneyBeat (WSJ Blog) – S&P 500 May Notch a Losing Streak Last Seen in March The S&P 500 could mark its fourth-straight day of declines on Wednesday, a streak last seen in March…The absence of four-day declines over the last nine months is one more marker of just how calm the stock market has been… Continue reading Stocks Notch An Elusive Losing Streak
The Wall Street Journal – House Republicans Weigh Linking Debt Ceiling Increase to Spending Bill A group of House Republicans is considering pushing to raise the government’s borrowing limit as part of the next long-term spending bill, a move that could help dispatch one of the thorniest issues for GOP lawmakers before next year’s primary… Continue reading Remember The Debt Ceiling?
The Financial Times – US banks’ optimism set to be tempered by weak trading revenues Weak revenues from trading are set to weigh on results of Wall Street banks in the fourth quarter, dousing some of the optimism over prospects for looser regulation and bigger payouts to shareholders. Shares in the big banks have moved… Continue reading Bank Revenues Set To Take A Hit
Bloomberg – Bond, Derivatives Trading to Shift Under MiFID The European Union’s MiFID II law that takes effect next month is expected to drive a significant, rapid shift in trading of bonds and derivatives to electronic and other trading venues. A Deloitte survey of a dozen buy-side firms showed the law will lead to a… Continue reading MiFID’s Effect Already Being Felt
The Financial Times – Wall Street banks push back on launch of bitcoin futures The world’s largest banks are pushing back on the introduction of bitcoin futures, raising concerns with US regulators that the financial system is ill-prepared for the launch of the contracts as the value of the volatile cryptocurrency has soared…the planned launch… Continue reading Banks Continue Their Fight Against Bitcoin
I thought it would be interesting to visualize Bitcoin’s volatility. Here’s a histogram of hourly price swings over the last 30 days. 30% of the time, Bitcoin’s price moved >1% during the course of an hour. 3.6% of hours had a >3% price swing. Almost a daily occurrence! ??? pic.twitter.com/mjYFGETfoQ — Leo Polovets (@lpolovets) December… Continue reading More On Bitcoin’s Volatility
The chart below measures risk-on/off cycles using BofA’s Global Flow Index, which reveals investor flows between risk and safe assets. As BofA states: The Flow indicator is a measure of investor sentiment for equities, bonds and money markets, calculated using investor flows (data from EPFR) and volumes. Levels greater/less than 0 indicate more/less stress than is normal. The current risk-on cycle has lasted a record 144 consecutive trading days. Data… Continue reading The Record Risk-On Cycle Continues
Comment The chart below shows the rolling three-month sum of stories including talk of ‘bubbles.’ Financial media had been exhibiting little fear of bubbles across financial markets until Bitcoin very recently caused an uptick. The next chart shows the percentage of bubble talk going to each major asset class. Technology stocks are gaining… Continue reading Bubble Talk Rebounding, But Driven by Bitcoin
A Look at various measures of implied volatility