The Financial Times – Mnuchin: US stocks to face ‘significant’ fall without tax reforms The US Treasury secretary has warned that American equities will reverse a “significant amount” of their recent gains if Congress does not enact reforms. Steven Mnuchin said in a Politico podcast that there is “no question that the rally in the stock… Continue reading Mnuchin Talks Markets and Tax Reform
The Wall Street Journal – Most U.S. States Aren’t Prepared For the Next Recession Just 16 states have adequate backup money on hand, according to a new Moody’s Analytics analysis If the next recession hit the U.S. this year, more than a quarter of states would be financially unprepared to weather even a moderate downturn, according… Continue reading States Least Prepared For The Next Recession
The Financial Times – ECB set for longer, slower taper to keep a lid on euro QE could be scaled back from €60bn a month to €20bn, but extended until late 2018 A chronic problem with eurozone QE is that markets have long suspected that the ECB could run out of assets to buy given… Continue reading More On The QE Taper Project In Europe
The Financial Times – US banks abandon crisis-era taboo of growth There was a telling moment during Goldman Sachs’ earnings call this week. Marty Chavez, the bank’s chief financial officer, had trotted through some third-quarter numbers, which were mostly better than analysts had expected. Bond trading revenues were down a lot from a year earlier but… Continue reading Investors Still Cautiously Optimistic On Investing In US Banks
The Chicago Tribune – Terry Savage: The next bear market is coming If you are still in the “accumulation” phase of your life, the next bear market will be an opportunity for you to buy more shares with your fixed monthly investment in your retirement plan — assuming you have the discipline to stick with… Continue reading Bearish Talk
Bloomberg Business – Robots Are Coming for These Wall Street Jobs Wall Street is entering a new era. The fraternity of bond jockeys, derivatives mavens and stock pickers who’ve long personified the industry are giving way to algorithms, and soon, artificial intelligence. Banks and investment funds have been tinkering for years, prompting anxiety for employees. Now,… Continue reading Robots Are Coming To Wall Street
The Hill – Cohn: Congress nearing deal to ease bank regulations Top White House economic adviser Gary Cohn said Monday that Congress could act to exempt major United States banks from tight Dodd-Frank Act banking rules by the end of 2017. Cohn, speaking to a banking industry conference in Chicago, said the White House and lawmakers from… Continue reading Financials Giddy About Deregulation
Bloomberg Politics – Taylor Impresses Trump for Fed Chairman, Warsh Slips Taylor has been a favorite witness for House Republicans critical of Fed discretion. But last week at a Boston Fed conference he said he didn’t think “rules should be used as a way to tie central bankers’ hands.” “There are reasons to run policy with… Continue reading The Race For Fed Chair
Comment The U.S. yield curve has reached a critical fork in the road – steepen in anticipation of continued growth and a rebound in inflation OR flatten in fear of a policy mistake by the Federal Reserve. The U.S. 2-year 10-year spread is near its flattest levels post-crisis. A break below 74.9 bps would most… Continue reading Hawkish Fed Chair Candidates Helping Drive Yield Curve Flatter
Bloomberg View – Victor Haghani & James White: Some Clarity on Risk Parity Risk parity and traditional portfolios are usually presented as being philosophically miles apart, but they are actually much closer. Risk parity is all about how an investor allocates risk, not capital, typically with the use of leverage and with the idea that… Continue reading Risk Parity
Bloomberg Gadfly – Liam Denning: The Bonds That Tie Shale To Kurdistan If it looks like the bond market has somehow forgotten the past couple of years entirely, there are some subtle differences beneath the headline numbers worth noting. Part of that retracement in average yields from double digits in early 2016 to the current level can… Continue reading A Look At Junk Bonds