The chart below shows the fixed income HFR indices versus a couple fixed income benchmarks (red and orange lines). Fixed income hedge funds have done OK against their benchmarks.
The blue line below shows a 50-day moving average of the total trading volume in actual high-yield bonds as measured by TRACE. The green line shows the 50-day average of the total dollar volume (price multiplied by shares) for the 25 largest high-yield ETFs. HYG accounts for roughly two-thirds of this total. The red line, which shows… Continue reading High Yield & Investment Grade Bond Trading Volume
The next two charts show investment grade and high yield spreads continue to narrow and are approaching their 12014 lows.
ETF buyers plowed money into crude oil ETFs and, as the green line in the bottom panel shows, they lost obscene amounts of money. When prices bottomed, they did the wrong thing and liquidated some of their position, limiting the gains they could make after the huge losses. As the blue line in the… Continue reading Crude Oil And Energy ETF Flows
Comment As we noted in Newsclips earlier today, many people have begun questioning the value of a college diploma in response to skyrocketing costs. The chart below offers a look at the unemployment rates of various groups of education attainment. At points in 2009 and 2010, the unemployment rate for college grads was almost 11%… Continue reading The State Of The Labor Market
Bloomberg – Fed Balance Sheet Shifts Into Limelight Absent Rate Hike Urgency Statement by FOMC many clarify timing of asset rolloff plans A larger source of uncertainty stems from the timing of when the Fed will start to shrink its $4.5 trillion holdings of mainly Treasuries and mortgage-related debt. Officials expect to begin the process this… Continue reading What to Expect on Fed’s Reinvestment Plan
View PDF CNBC – Wall Street bracing for ‘significant correction’: Survey CNBC Fed Survey: 72% say Fed will hike in December When it comes to both fiscal and monetary policy these days, Wall Street looks to be expecting less. Respondents to the CNBC Fed Survey have marked down their expectations for Federal Reserve rate increases and for fiscal policy stimulus… Continue reading CNBC’s Fed Survey
Bloomberg – As VIX Plumbs Depths of Torpor, Betting on Its Future Gets Brisk Options volume on the volatility index at highest for any July Falling asleep as the CBOE Volatility Index signals ever-expanding dormancy in the equity market? Options traders aren’t. In fact, they’ve never been busier at this time of the year, buying and… Continue reading The Era of Ubiquitous and Accessible Information Dampening Volatility
Bloomberg View – Tim Duy: Easier Financial Conditions Will Keep the Fed on Track Policy makers don’t want to find themselves well below their estimate of the neutral interest rate should inflation accelerate. The path laid out by the Federal Reserve at the beginning of the year for three interest-rate increases plus the start of reducing its… Continue reading Easy Financial Conditions Might Overrule Low Inflation In Fed’s Eyes