The Financial Times – Falling junk bond spreads trigger sense of foreboding Oleg Melentyev, Bank of America Merrill Lynch’s new head of high-yield strategy, has been dogged by a question from clients over the past month: what is to stop the extra yield investors demand to own the riskiest corporate debt falling to a record… Continue reading A Look At Junk Bond Supply/Demand
MoneyBeat (WSJ Blog) – Cheap, Boring ETFs Rake in the Bulk of New Money Nearly 75 cents of every new dollar invested in ETFs this year targeted the cheapest funds on the market, a trend that partially highlights investors’ urge to mimic major U.S. equity benchmarks that continue to notch all-time highs. Relentless demand for… Continue reading Breaking Down ETF Flows By Fees
The Economist – The Bitcoin Bubble There may be good reasons for buying bitcoin. But the dominant reason at the moment is that it is rising in price PUT the word Bitcoin into Google and you get (in Britain, at least) four adverts at the top of the list: “Trade Bitcoin with no fees”, “Fastest… Continue reading Bitcoin Bubble
Value ETFs have seen a swell of net inflows in October. The chart below shows net 20-day flows for all U.S. growth (top) and value (bottom) focused ETFs. Value ETFs have seen over $2 billion in net inflows in the past 20 days, versus only $759 million for growth. Inflows for value funds peaked at… Continue reading U.S. Investors Favored Value ETFs in October
The visualization below offers a series of long-term stock charts. As the fourth tab shows, investors have not lost money on stocks on an inflation-adjusted basis over a 30-year period since the 30 years ending 1946. Likewise, the visualization below offers a long-term look at several tenors of yields. Use the dropdown box to… Continue reading A Long-Term Look At Stocks, Bonds & Valuation
Emerging market currencies with stronger business innovation and renewable energy policies remain better performers (upper right). The emerging market trade has transitioned from a commodity to technology focus.
The chart below shows the 90-day change in U.S. 10-year term premium on the left axis (blue) and the z-score for economist forecasts ranges on the right axis (orange). Economist forecast ranges for U.S. Treasuries, inflation, GDP, and more are finally widening after reaching nearly their tightest on record. Increased uncertainty should provide a tailwind… Continue reading Term Premium Primed to Rebound
Odds of a December rate hike jumped to 88% from 82% after the Fed statement earlier today. Remember that two hikes have already occurred (March and June), so the chart below shows the total hikes for 2017 (green) and 2018 (orange) include these already done moves.
Stock buybacks (blue line below) have been falling since Q1 2016. On a rolling 4-quarter basis, buybacks are now slightly lower than dividends paid (red line).
New home sales beat the consensus forecast (last green bar) by the most since October 2005. Home Prices rose 6.1% in the 12 months ending in August. Home prices are growing faster than wages and rents. Housing starts slowed in September and missed the consensus forecast (last red bar) … Continue reading An Updated Look At Housing
Trump biggest impact on the economy has been on rolling back regulation. Here is an update of our preferred measure of regulation.