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Charts of the Week

High Yield And Investment Grade Spreads Are Near Their June 2014 Lows

June 28, 2017

Despite Energy lagging in recent weeks (bottom chart) Investment grade (first chart) and high yield (second chart) are nearing their June 2014 post-crisis lows.   The next chart shows total returns by sector for the Bloomberg Investment Grade and High Yield indices since the May 24 high in crude. While the high yield energy sector… Continue reading High Yield And Investment Grade Spreads Are Near Their June 2014 Lows

Charts of the Week

Gas Prices Remain Low For The Fourth Of July Holiday

June 28, 2017

Gas Prices:  Unleaded gas at $2.25/gallon. 

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Newsclips

Yellen’s Big Foes Remain Stubborn Inflation and Financial Leverage

June 28, 2017

Federal Reserve Atlanta Deflation Probabilities: Bloomberg – Stop Looking for Fed Errors in the Bond Market Past dislocations suggested deflation was on the horizon, but it never came to pass. For the moment, financial markets are pricing inflation below target for the next 10 years, and put the long-term neutral real rate at 1 percent. A… Continue reading Yellen’s Big Foes Remain Stubborn Inflation and Financial Leverage

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Yellen Talks Banks And Stocks 

June 28, 2017

CNBC – Yellen: Banks ‘very much stronger’; another financial crisis not likely ‘in our lifetime’ Fed Chair Janet Yellen said the banking system is “very much stronger” due to Fed supervision and higher capital levels. Speaking during an exchange in London with British Academy President Lord Nicholas Stern, the central bank chief said the Fed has… Continue reading Yellen Talks Banks And Stocks 

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Newsclips

The Fed’s Balance Sheet

June 28, 2017

  Bloomberg Briefs – Reduction of the Fed’s Balance Sheet Looms Barring significant market turbulence around the debt ceiling debate, which could lead to a government shutdown in early fall, BI Economics expects a rate hike in September along with the announcement of the start date of the balance-sheet unwind. The implementation of the plan, laid… Continue reading The Fed’s Balance Sheet

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U.S. Shale Expects OPEC to Flinch

June 28, 2017

Reuters – U.S. shale CEO sees Saudi Arabia moving to lift oil prices “I personally believe (the oil price) where we are right now is not sustainable. It comes in the form of two words: Saudi Arabia. They cannot have a scenario, which is $43 or $44 (per barrel) oil, and sustain their national budgets,”… Continue reading U.S. Shale Expects OPEC to Flinch

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Newsclips

Oil ETF Investors Still Bullish

June 28, 2017

Bloomberg Brief – Biggest Oil ETF Swells Even as Crude Price Plummets Crude tumbled into a bear market last week, but investors never gave up pouring money into the $3.15 billion United States Oil Fund LP, the world’s biggest tracking the commodity. Sound weird? It’s not. The ETF, which holds futures contracts on WTI crude, has… Continue reading Oil ETF Investors Still Bullish

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ETFs Own A Small Portion Of The Stock Market But Are Gaining Ground Fast

June 28, 2017

The Wall Street Journal – ETF Buyers Propel Stock Market Rally Exchange-traded funds spent $98 billion buying U.S. stocks in first quarter, when other big buyers were stepping back Booming demand for passive investments is making exchange-traded funds an increasingly crucial driver of share prices, helping to extend the long U.S. stock rally even as valuations… Continue reading ETFs Own A Small Portion Of The Stock Market But Are Gaining Ground Fast

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Newsclips

Markets Misjudge Draghi’s Speech On Stimulus

June 28, 2017

Reuters – ECB chief was overinterpreted by markets: sources European Central Bank President Mario Draghi intended to signal tolerance for a period of weaker inflation, not an imminent policy tightening, when his comments sent the euro higher this week, sources familiar with Draghi’s thinking said on Wednesday. The ECB declined to comment. Draghi’s comments on Tuesday,… Continue reading Markets Misjudge Draghi’s Speech On Stimulus

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Outflows In Cyclical Industry Stocks And The Fed

June 28, 2017

Business Insider – The stock market is sending Janet Yellen a crucial message So far this year, they’ve pulled more than $16 billion out of cyclical industries — consumer discretionary, financials, energy, industrials, materials and tech — but only removed $1.8 billion from bond proxies, BAML data show. The dynamic was even more exaggerated this past… Continue reading Outflows In Cyclical Industry Stocks And The Fed

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Are The FAANMG Stocks Ready To Collapse?

June 28, 2017

  Telegraph – The tech bubble: how close is it to bursting? There are signs that trouble may be brewing in the tech paradise.  US technology stocks have been under pressure in the past week and struggling to recover. Apple, the world’s most valuable company by market capitalisation, saw $50 billion of its value wiped out… Continue reading Are The FAANMG Stocks Ready To Collapse?

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Byron Wien On The Markets

June 28, 2017

Real Clear Markets – Byron Wien: Investors Should Hang In There, Even If a Correction Occurs As for the equity market, it seems unstoppable. With earnings of $125, the Standard & Poor’s 500 is selling at 20 times. This is above the historical average, but at current interest rates it is a reasonable multiple in… Continue reading Byron Wien On The Markets