Comment Earlier this month, as the U.S. was bracing for the impact of Harvey and then Irma, we had a series of posts looking at market behavior after major hurricanes. Below we offer a quick summary of how markets have performed in the wake of these two blows to the U.S. mainland. Harvey made landfall… Continue reading Update on Markets After Major Hurricanes
Bloomberg – There Are No Bad Securities, Only Bad Correlations Another correlation assumption that must receive constant attention is the one between stock and bond returns. Even though the S&P 500 is up 11.5 percent this year and the iShares 20+ Year Treasury Bond exchange-traded fund has gained 7.6 percent, their returns are strongly negatively… Continue reading The Correlation Between Stocks & Bonds
The Financial Times – Corporate America’s patchy disclosure on cash piles raises risks The latitude US regulators give corporate America on what they need to divulge is creating risks, experts say, given the sheer scale of the cash and other investments companies have accumulated in recent years and the danger that holdings of financial assets… Continue reading Breaking Down Corporations’ Cash On The Sidelines
The Financial Times – Commodities markets swell in size despite price slide Commodities prices are heading for their sixth loss in seven years. But commodities markets have never been bigger. Open interest — the number of commodities contracts outstanding — has been booming on futures exchanges this year. From crude oil to soyabean oil, the… Continue reading Betting On Commodities
Real Time Economics (WSJ Blog) – IMF to World’s Central Banks: Don’t Ignore Your Economies’ Weak Wage Growth The International Monetary Fund’s researchers have a message for the world’s economic policy makers: the weak wage growth in their economies is a sign that it’s still premature to worry about inflation or to take steps that… Continue reading The IMF Warns Central Bankers On Wage Growth
The Financial Times – EM currency rally stutters after Yellen rate comments Emerging markets currencies are under fire on Wednesday as investors rachet up their bets on a December rate hike in the US after Federal Reserve chief Janet Yellen stuck to her views that gradual rate rises are needed despite persistently weak inflation readings. The… Continue reading Emerging Markets
Bloomberg – Inflation Is No Mystery to the Bond Market Bond markets have begun to anticipate at least some reflation in a more meaningful way. Long-term real yields have fallen on average by 40 basis points since the start of the year, driven by flows into inflation-linked bond ETFs from investors seeking protection from higher… Continue reading The Bond Market & Inflation
Bloomberg – This Trader Made 295% on Cryptocurrency Derivatives The price of bitcoin has increased sixfold in the past year, despite a 25 percent plunge this month triggered by China’s crackdown on digital tokens. Not a week goes by without startups launching new ones to fund everything from dentistry to Las Vegas strip clubs. Even… Continue reading Getting Rich Is Easy!
Long-term Treasury ETFs saw record inflows leading up to the September FOMC meeting. Yields failed to move lower and are rising sharply today. Some investors had already begun to lose faith before today’s move. The chart below shows 5-day net flows swung from +$1.9 billion on September 13 to -$519 million as of September 26. … Continue reading Investors Pulling Back After Piling into Long Treasury ETF
As the chart below shows, shortly after the Brexit vote last year both the Stoxx Europe 600 (red line) and the S&P 500 (blue line) fell sharply. After that initial fall, they have advanced 11.34% and 18.29%, respectively. The MSCI World Stock Indices are all also up after initially falling. The… Continue reading Stock Total Returns Since The Brexit Vote