If markets were really worried about an all-out trade war, equities would be down well below their early April low, interest rates would be spiking and the yuan would be crashing. While stocks and the yuan are down, they are not yet at panic levels.... Read More
Inflation is missing expectations heading into the summer of 2018, just when central banks ramp up hawkish discussions. Moderately strong economic data in the U.S. will keep the Fed on its hiking path, but a lack of inflation/wage momentum will pressure the yield curve flatter. Those long TIPS should get concerned in the event the U.S. 3-month 10-year spread flattens below 50 bps in the months to come.... Read More
Trade policy concerns are again on the rise, but financial markets are thus far refusing to react. Implied volatility remains low and asset returns are not yet showing a strong connection to tariff-induced headlines. ... Read More
The high yield bond market is outperforming but serious risks from zombie companies and tighter financial conditions remain. Will improving economic growth keep the Fed the room it needs to keep raising interest rates? ... Read More
Earnings, revenues, and guidance are booming. If this is not good enough for the stock market, company results could act as a headwind for stocks the rest of the year.... Read More
Today's topics include diverging central bank policy, emerging markets & the Fed, European bonds, inflation, crude oil supply and bank payouts.... Read More
A look at our top posts from the week of June 11 - June 15, 2018.... Read More
Charts that are near extremes and the most popular contracts that caught our eye this week.... Read More
The shift to global tightening in late 2017 will live on assuming the ECB puts an end to purchases by year-end and raises rates in 2019. Financial conditions in the U.S. are not likely to rapidly rise unless the Fed's target rate deviates from the reversal rate.... Read More
The economy is in great shape. If you look at household surveys, confidence is high. In businesses, confidence is high. If you survey workers about the job market, they will say it is a good environment to find jobs. Businesses... Read More
Fed watching is for the time being a dead art form with transparency and data dependency on the rise. Bond investors have responded by pricing in dampened volatility and uncertainty. Those tracking the economy in real-time will outperform those attempting to find nuggets within Fed communications.... Read More
Personal consumption continues to make up a larger portion of U.S. GDP as time progresses.... Read More
Treasuries and corporates remain the largest debt markets in the United States. Who owns these markets?... Read More
The total amount of outstanding credit relative to GDP peaked in June 2009.... Read More
A look at the size of the real estate market in the U.S., including residential and commercial... Read More
Student loans now total $1.52 trillion.... Read More
Defined benefit plans still make up 40% of retirement assets in the United States.... Read More
The investment management industry has highly elastic pricing. To-date, the industry has been slow to respond to the lower-cost funds. However, the flurry of stories about funds cutting fees in the last few weeks could be the start of a larger trend toward aggressive pricing.... Read More