Why One Bank Thinks Emerging Markets May Be In Trouble
Let’s talk about emerging markets. Over the past five days, it’s become abundantly clear that the Fed was getting a bit nervous about the odds the market was assigning to a June rate hike. In short, it was readily apparent that virtually everyone assumed next month was a no go. The looming Brexit referendum only…
Margins Or Buybacks: What’s Really Driving S&P EPS Beats?
While perusing FactSet’s “Thought Leadership” section on Friday I ran across something interesting. There’s a narrative out there about buybacks that’s been propagated by a variety of outlets over the past 12 or so months that ties ZIRP and share repurchases to equity strength. To be sure, it’s a compelling argument. Here’s how it goes.…
Market Uncertainty
Market Uncertainty Market uncertainty is heating up. The Fed toying with the markets each day as investors hang on their ever word. The chance of a Fed Funds rate in June as elevated to 30% from near zero only a few weeks ago. There is a major election with big policy issues at stake which…
Calls For “Helicopter Money” Grow As G7 Meeting Betrays Global Growth Jitters
Finance chiefs from the G7 economies are meeting in Japan this weekend ahead of next week’s G7 summit. At the top of the agenda: sluggish global growth. As anyone who follows global macro is acutely aware, Japan is in many ways the poster child for subdued economic activity. Last year, the country received the rather…
Here’s What To Watch Ahead Of The All Important June Fed Decision
Well, here we go again. Both crude and stocks got off to a rocky start on Thursday as the Dow plunged triple digits and oil fell more than 2.5%. The culprit: why, the Fed of course. This week has reinforced the market themes that have played out for most of this year. On Monday we…
Opportunity in the Bonds
Opportunity in the Bonds It was only last week that I talked about scaling into a longer term short position in the bonds. I was only able to get partially in the position when Bonds broke hard today. Never look a gift horse in the mouth. I covered the short Bond position today and will…
Fed Stuns Market With Hawkish Meeting Minutes, June “Live” After All
Surprise, surprise. Minutes from the Fed’s April meeting are out and the message is overwhelmingly hawkish. June is “live” after all. Equity markets immediately dipped into the red although after yesterday’s commentary from Williams and Lockhart, investors probably should have expected this. In hindsight, it looks like the San Francisco and Atlanta Fed chiefs were…
Trouble With The Curve? Yield Curve Flattens Most Since 2007 While Goldman Turns Bearish On Stocks
On Tuesday, equity markets stumbled after a firm CPI print and upbeat commentary from the San Francisco Fed’s John Williams and Atlanta Fed President Dennis Lockhart seemed to suggest that a June rate hike might still be a possibility. The triple digit decline on the Dow represented a return to a perverse dynamic created by…
What do the Charts Say about this Sell Off?
What do the Charts Say about this Sell Off? The sell off today has left markets in a pivotal area. The S&P has been able to hold this level for the past month. What happens here could be the set up for the rest of 2016. We will also cover gold, oil, and RUT.
Stocks Swoon As Good News Is Still Bad News
It was just yesterday when Richmond Fed chief and consummate hawk Jeffrey Lacker told The Washington Post that in his view, the FOMC needs to “catch up” after falling behind the curve (no bond market pun intended) on policy normalization. Whatever impetus there was for a March hike promptly disappeared after stocks got off to…