Bloomberg – Wall Street Sees Goldilocks, So Beware Bears Corporate America’s earnings outlook is getting dimmer, but no one on Wall Street seems to notice. That could soon be a problem. According to a Bank of America Corp. monthly survey out this week, investment managers have grown considerably more bullish on corporate growth. In the October… Continue reading Length of Risk-on Cycle Reaching Extreme
Financial Times – In charts: has the US shale drilling revolution peaked? Data show slowdown in rig productivity and drilling time improvements levelling off Over the past year, however, the productivity gains seemed to have slowed considerably, suggesting that the revolutionary era for progress in shale is over. In the Eagle Ford shale, productivity — as… Continue reading Higher Cost Shale Producers Still Struggling
Bloomberg – China’s Treasury Holdings Rose in August to Highest in Year China holds $1.2 trillion in Aug., up $34.5 billion from July China’s holdings of U.S. Treasuries rose in August to the highest in more than a year as the world’s second-biggest economy saw a strengthening of its currency. China’s holdings of U.S. bonds,… Continue reading TIC Update – China Buying USTs, but Do Not Get Too Excited
Bloomberg Politics – Trump Plans to Pick Next Fed Chair Before Nov. 3 Asia Trip President Donald Trump plans to announce his nominee to chair the Federal Reserve before he leaves Nov. 3 for an 11-day trip to Asia and Hawaii, a person familiar with the process said. Trump is working with a shortlist of five… Continue reading The Race For Fed Chair
CNBC – Bad news for the bulls: There are now more bulls Is investor optimism a warning sign? The Investors Intelligence Bull/Bear ratio has climbed back above 4 for the first time since April 2015 — which ironically may serve as a bad sign for the market. “It does make me nervous, because we’re getting very,… Continue reading Investors Bullish On The Markets
Schwab.com – Understanding the Federal Reserve’s Shrinking Balance Sheet – The days of easy monetary policy are coming to an end, as the Federal Reserve begins to reduce its $4.5 trillion balance sheet along with raising short-term interest rates. – Although inflation is quite low, we expect this monetary policy tightening will mean moderately higher bond yields… Continue reading Balance Sheet Normalization
The Financial Times – Central bankers have one job and they don’t know how to do it Brainard recognises the problem. She is willing to acknowledge the decades of data disproving the model favoured by Blanchard, Fischer, and Yellen — even though this leaves her without a quick and ready way to explain where inflation “comes… Continue reading More On Central Bankers’ Confusion About Inflation
Project Syndicate – KAUSHIK BASU: Central Banks Must Work Together – or Suffer Alone Global growth seems to be moving, slowly but surely, along the path to recovery. The International Monetary Fund’s latest World Economic Outlook predicts 3.5% global growth this year, up from 3.2% last year. But there’s a hitch: the easy monetary policies that have largely… Continue reading Why Central Bankers Must Work Together
The Wall Street Journal – Hedge Funds Wrong-Footed by Prospect of Interest-Rate Rises Losses highlight how some funds have been positioned for current benign economic conditions to continue The prospect of interest rate increases in the U.S. and U.K. is playing havoc with the trades of several large hedge funds. Computer-driven funds have been trying to… Continue reading Hedge Funds Losing Money On Interest Rate Bets
Bloomberg Markets – Hedge Funds Can’t Resist This Volatility Trade That’s Been Losing Money Does the lack of worry in global financial markets worry you? A growing number of hedge fund managers are counting on it. Brevan Howard Asset Management, 36 South Capital Advisors, One River Asset Management and at least three other firms are rolling… Continue reading Hedge Funds Continue To Bet On Future Volatility
Bloomberg Business – A $4 Trillion Hole in the Bond Market May Start Filling in 2018 A key dynamic that’s been holding down bond yields since the global financial crisis is poised to ease next year — presenting a test to riskier parts of the market, according to analysis by Oxford Economics. In the aftermath of… Continue reading Will Corporate Bond Issuance Be Back In 2018?
Bloomberg Business – Corporate Bond ETFs Get Inflows, Treasury ETFs Get Cold Shoulder Yield-hungry investors poured money into fixed-income ETFs to close out the third quarter, with some of the top gains coming in corporate-bond funds. With talk of tax reform swirling around Washington again, U.S. corporate-bond ETFs posted leading net inflows in the two weeks… Continue reading Corporate Bond ETFs See Inflows