CNBC – Fear of higher rates is what’s really scaring the stock market A bearish run-up in interest rates spooked the stock market Wednesday, and while a major shakeout may not yet be in the cards just now, analysts say it’s a sign of things to come as the world’s major central banks move to… Continue reading Higher Rates Are Scaring The Stock Market
Wall Street Journal – U.S. Government Bond Yields Rise as Investors Anticipate Tighter Monetary Policies Yield on 10-year Treasury note settles above 2.4% for first time in more than five months Investors sold Treasury bonds Tuesday, causing the yield on the 10-year note to settle above 2.4% for the first time in more than five months,… Continue reading Long Term Treasury ETF Investors Buying the Dip
MoneyBeat (WSJ Blog) – How an Analyst Thinks Bitcoin’s Volatility Is Predictable Bitcoin isn’t for the faint of heart. Neither is technical analysis. Still, one analyst believes marrying the two can help explain the cryptocurrency’s surge this year. J.C. Parets, founder of Eagle Bay Capital and author of the All Star Charts blog, reckons a… Continue reading A Reminder To Those Who Think Bitcoin Is Easy Money
The Financial Times – Don’t bet on Trump’s Fed pick to really move the bond needle So it makes sense that yields have risen over the past month when first Mr Warsh and then Mr Taylor were perceived to be in the lead. Should we therefore sell bonds and pile into rate-sensitive stocks (banks have… Continue reading The Fed & The Bond Market
Bloomberg – Yellen Wonders If Fed Inflation Credibility Dented on Her Watch Federal Reserve Chair Janet Yellen has begun to openly acknowledge the possibility that the credibility of the central bank’s 2 percent inflation goal may have weakened somewhat — a surprising admission in what could be the final months of her tenure. “I must… Continue reading Central Banks’ Battle With Inflation
Bloomberg – Taper, Recalibrate, Whatever. A $6 Trillion ECB Is Coming On Thursday, the European Central Bank has promised to reveal how its quantitative easing program will be recalibrated — President Mario Draghi’s preferred term for what everyone else calls tapering. After arriving late to the QE party, the ECB has done more than its peers to… Continue reading Deeper Dive into Scenario Analysis of Shifting Central Bank Balance Sheets
Schaeffer’s Investment Research – Inverse Volatility Traders are Cashing Out But an inverse volatility ETF isn’t exactly a garden-variety stock, and — as we’ve seen throughout 2017 — the VIX can stay much lower (and for much longer) than most of us would have predicted. In fact, consider the contrarian implications of this observation: SVXY is… Continue reading Paring Back Bets on Short Volatility ETFs
Earlier this year we took a tongue in cheek look at T-mobile’s role in setting fed policy. As T-Mobile pioneered unlimited cell phone data plans, the BLS applied hedonic adjustments to their calculations of cellular telephone services in CPI. Yellen weighed in earlier this month: The Federal Reserve (October 15, 2017) – Janet Yellen: The… Continue reading Updating T-Mobile’s Impact On Inflation
The Economist’s Intelligence Unit (EIU) measures political risk for 132 countries. It is updated quarterly through September 30, 2017. The chart below shows the 10 highest risk countries with the highest political risk score. The usual suspects are on the list along with Britain. While not underestimating the risks inherent with Brexit, is Britain seriously a higher political… Continue reading Measuring Political Risk
Bloomberg Business – Bond Market’s 2.4% Moment of Truth Elicits Warning From Gundlach The bond bears may finally be having their moment. The 10-year Treasury yield rose five basis points Tuesday to 2.42 percent, closing above 2.4 percent for the first time in five months. The yield had previously failed to sustain increases above that mark… Continue reading The Moment Of Truth For Bonds
The Wall Street Journal – U.S. Dollar Lifted By Rising Government Bond Yields, Fed Hopes The dollar edged higher as speculation about the course of monetary and fiscal policy boosted the currency. The WSJ Dollar Index rose 0.3% to 87.31 as the currency gained against the Japanese yen, Swiss franc and British pound. The dollar has… Continue reading What Moves The Dollar