The Economist – Buttonwood: Alarm grows about over-exuberance in corporate lending The nervous hear echoes of the build-up to the financial crisis The cycle has turned again. Analysis by Moody’s, a ratings agency, shows that the proportion of the loan market that is “covenant-lite” has risen from 27% in 2015 to more than two-thirds in the… Continue reading Are Cov-Lite Loans Now A Problem?
Bloomberg – Investors Scramble to Keep Pace With New Market Outlook Chance of rate rises this year has grown across largest banks The prospect of four of the world’s five largest central banks moving to tighten policy at the same time is shocking traders after years of easing, with the dislocations in money markets also rippling… Continue reading Hawkish Rhetoric at Post-Crisis Highs for ECB and BOE, Will it Last?
Comment Earlier this week we linked to our podcast with Jim Grant in which we talked about the yield curve, debt problems in Illinois, and the Fed. The Twitter account Rudolf E. Havenstein, transcribed some of our comments about the Fed. I transcribed some of Jim Bianco’s comments on a recent Grant’s Podcast https://t.co/v8gG8jQ98t —… Continue reading Thoughts On The Fed
The $46.9 billion broad-market bond ETF that trades as AGG just reported its biggest daily inflow in more than a year. pic.twitter.com/e8qtgPgq3h — Lisa Abramowicz (@lisaabramowicz1) June 29, 2017 Comment While it is true that the large AGG ETF had huge inflows yesterday (chart above), the chart below shows flows in all broad… Continue reading About Bond ETF Flows
Bloomberg Gadfly – The Short Life of the Oil Short Squeeze Oil traders are warning that the oil market is so bad it might get good really quickly. My colleagues at Bloomberg News reported on Wednesday that sentiment is so bearish — as expressed via positions in Brent crude futures contracts — that a short-squeeze… Continue reading Crude Oil Sentiment
Bloomberg – One Big Reason Emerging Markets Aren’t Getting Hit by Lower Oil Prices Technology sector is having greater influence on EM assets This resistance may be a result of the growing influence of the technology sector, which has shown strong gains this year and reflects the maturing make-up of emerging market economies. The MSCI Asia… Continue reading Tech Sectors Helping Global Equities Look Past Oil
Federal Reserve Bank of Dallas – Oil and Gas Expansion Continues but Uncertainty Rises Business activity increased in the second quarter, albeit at a slightly slower pace, according to oil and gas executives responding to the Dallas Fed Energy Survey. The business activity index—the survey’s broadest measure of conditions facing Eleventh District energy firms—remained robust… Continue reading Dallas Fed Survey – U.S. Shale Producers Self Financing Expansion
Bloomberg Business – Suddenly the U.S. Is Exporting More Crude Than a Bunch of OPEC Members Oil exports from the U.S. have risen 1,600 percent in four years. Move over, Equatorial Guinea. Slide aside, Gabon. Make room, Ecuador. There’s a new major oil exporter on the world stage, and it’s the United States of America. Most… Continue reading The U.S. Is Becoming A Crude Oil Exporter
CNBC – Technology is the hidden driver of low inflation: BlackRock’s Rieder Going forward, Rieder argues that the Federal Reserve needn’t obsess over its 2 percent inflation target. Given the trend outlines above, inflation “varies radically by industry,” which makes a 2 percent systemwide inflation target “an increasingly challenging paradigm to execute on today in the… Continue reading Federal Reserve Turns to ‘Models’ to Suggest Inflation Will Rebound
Bloomberg Business – Central Bankers Tell the World Borrowing Costs Are Headed Higher Markets fluctuate on hawkish notes from Europe to Americas Global central bankers are coalescing around the message that the cost of money is headed higher — and markets had better get used to it. Just a week after signaling near-zero interest rates were… Continue reading Interpreting Central Bankers
Bloomberg Business – Stephen Gandel: Bull Market Buyers Might Surprise You The buyers of stocks may not be who everyone thinks they are. Last week, Goldman Sachs released a report saying the recent bull market is being increasingly fed by a single source: exchange-traded funds. The Wall Street Journal echoed on Wednesday with an… Continue reading Passive Investing