Everyone has an opinion on the political chaos in Washington. The headlines below are just a sampling: The Chicago Tribune – (February 14, 2017) Jonathan Bernstein: Trump’s White House is falling apart The Atlantic – (May 17, 2017) The Trump Presidency Falls Apart After an extraordinary 10 days, the tenure of the chief executive may have… Continue reading Despite The Political Choas …
One of the more important parts of the Trump trade is an unprecedented cut in regulations. This is largely being ignored by the media. While the drama in Washington DC is unlikely to help Trump’s approval rating, the markets are more focused on the business-friendly aspect of this administration. The Trump trade has three parts;… Continue reading The Trump Trade Is Still Working …
As the chart below shows, the stock market has had tremendous returns since election day nine months ago. One of the best-performing sectors since the election has been financials. Hopes of reduced regulation (Dodd/Frank) and higher interest rates (Fed hikes) are driving these returns. On the other end, energy is one… Continue reading Stock Sector Returns Since The Election
Since election day total returns in the Treasury market are negative. Note that most of those losses came soon after the election and the market has been recovering since. The 2-year has seen the best return over this period. The fixed-income sector with the best total return since the election has been the… Continue reading Bond Returns Since The Election
Above we show how the US market has done well post election. That said, the next chart shows world stock market total returns post election. The US total return is black and the world total return is thick blue. The US is underperforming the world and near the bottom of the post election return derby.
We view betting markets as an aggregate of consensus opinion. That does not mean it will always be correct, but it helps us determine current expectations. According to the betting markets at Predictit.org, Yellen’s odds of being reappointed Fed chair have slumped in recent days to just 12%. Cohn is now leading the race with… Continue reading Yellen About To Be Third In A Two Horse Race?
Of the five largest stock markets in the world, three are in Asia. The U.S. is larger than the next four combined.
Consensus Inc. conducts a weekly survey of over 100 futures traders and investment newsletter writers. They simply ask participants whether or not they would describe themselves as bullish on a number of markets. In the week ending July 28, 68% of participants said they were bullish on the euro. Since the Great Recession, this is… Continue reading The Long Euro Trade Is Getting Overcrowded
The interactive charts below offer a look at Treasury, agency, corporate and equity purchases by foreigners through May 31. Note that foreigners bought more U.S. corporate bonds in May 2017 than any time since December 2008 (last blue bar).
In a Newsclips post earlier today we examined the market cap of stocks versus GDP, money supply vs GDP and the rate of change in the market cap of stocks to GDP. The charts below additionally include a look at the market capitalization of domestic bonds versus GDP.
The situation in Venezuela is getting worse. The black market rate of Venezuela’s currency continues to collapse. Note that in the last year the black market rate went from 1,011 Bolivars to buy a dollar to 11,186. In other words, Venezuela’s currency dropped 91% just in the last year, 71% in just the last six months (on… Continue reading Venezuela Is Coming Apart
The Wall Street Journal – Inflation Tame in June, Complicating Fed’s Rate Decision Officials have been expecting a pickup in prices as the economy improves, but it isn’t appearing Some Fed officials have expressed concern in recent weeks about pushing ahead with interest-rate increases in light of the softening inflation data. Federal Reserve Bank of Philadelphia… Continue reading Finding Quality Labor Becoming a Significant Dilemma