Monday , September 16 2019
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Tag Archives: bonds

Jump in Yields Didn’t Derail Equity Rally While Sterling Rallies Ahead of the Weekend on (misplaced) Brexit Optimism

The most striking thing about last week's price action was the surge in US yields.  The 10-year yield jumped about 34 basis points, the most in three years and returned to levels not seen since August 2 (1.90%).  A deluge of investment-grade corporate bonds and US Treasuries ($78 bln auctioned to lukewarm reception), coupled with an acceleration of core CPI (highest in 11 years), optimism on the trade front, and Mnuchin's insistence on pushing forward with an extra-long bond, (50, and...

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SPECIAL REPORT: The Yield Curve And What It Means

The Yield Curve Inverted! Recession is Coming! Do you need to worry about the yield curve inversion? Not if you have a strategy appropriate to your circumstances. Not if you know what tactics you will employ when recession is imminent. And most importantly, not if you know what the yield curve and other indicators are really saying about the current economy. Our Special Report on the Yield Curve will help you make sense of this yield curve phenomenon and all its implications, and will counsel...

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War Gaming The Trade War

People respond to incentives. So do national governments. This is foundational to both economics and geopolitics. Carefully examining each side’s incentives can illuminate how a conflict will end. No one has infinite choices. They choose from limited options. That applies to the US-China trade war, which is right now one of our top economic issues. So let’s think through what the players really want, and what each can actually do. Outrageous or Flexible? To begin, let’s note that the US and...

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The Lunacy Of The Dow

I’ve been on Twitter (TWTR) quite a few times railing against the Dow Jones Industrial Average and its price-weighted calculation. And, of course, I am not alone. This index presents a distorted view of any given day’s events although most of the time its foibles are hidden in the performance of the rest of the market. Let’s look at today, September 11, 2019. I am writing at about 2:30 in the afternoon and the Dow itself is up roughly 137 points on the day. All of that gain, and I mean all of...

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The August Jobs Report Confirms The Economy Is Slowing

After the monthly jobs report was released last week, I saw numerous people jumping on the unemployment rate as a measure of success, and in this particular case, Trump’s success as President. Unemployment November 2016: 4.7% Unemployment August 2019: 3.7% Argument solved. President Trump has been “Yuugely” successful at putting people to work as represented by a 1% decline in the unemployment rate since his election. But what about President Obama? Unemployment November 2008: 12.6%...

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2020 Will Be The Most Volatile Year In History

The last few weeks marked a turning point in the global economy. It’s more than the trade war. A sense of vulnerability is replacing the previous confidence—and with good reason. We are vulnerable, and we’ll be lucky to get through the 2020s without major damage. Let’s talk about the risks facing us in the next year or so and the economic environment in which we will face those risks. Supply Shocks Ahead In a recent Project Syndicate piece, NYU professor and economist Nouriel Roubini outlined...

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A Bigger Boat

For every action there is a reaction. Not only is that Sir Isaac Newton’s third law, it’s also a statement about human nature. Unlike physics where causes and effects are near simultaneous, there is a time component to how we interact. In official capacities, even more so. Bureaucratic inertia means a lot more than just resistance to change, it also means, at times and in certain capacities, all sorts of biases. When the bureaucracy predicts one set of circumstance, it is as likely if not...

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An Investor’s Desktop Guide To Trading – Part II

Read Part-1 Here Currently, it seems that nothing can derail the bull market. Trade wars, weakening economic growth, deteriorating earnings, and inverted yield curves have all been dismissed on “hopes” that a “trade deal” will come, and the Federal Reserve will cut rates. While the last two items may indeed extend the current cycle by a few months, they won’t change the dynamics of the former. Eventually, this cycle ends. Of that, there is little argument. It is the “when,” that is tirelessly...

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The Costs & Consequences Of $15/Hour – The Update

In 2016, I first touched on the impacts of hiking the minimum wage. “What’s the big ‘hub-bub’ over raising the minimum wage to $15/hr? After all, the last time the minimum wage was raised was in 2009. According to the April 2015, BLS report the numbers were quite underwhelming: ‘In 2014, 77.2 million workers age 16 and older in the United States were paid at hourly rates, representing 58.7 percent of all wage and salary workers. Among those paid by the hour, 1.3 million earned exactly the...

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Job Report: Badly Misses Estimates As Economy Slows

The jobs report dramatically missed expectations today, especially with private jobs. ​Initial Reaction – Huge Misses The Econoday consensus was for a payroll expansion of 163,000 jobs, 150,000 of them private. The ADP forecast was 195,000 jobs.ADP missed consensus by 65,000 jobs.Econoday missed consensus by 33,000 jobs.Econonday missed the private consensus by 54,000 jobs.The Econoday lowest estimate missed the private consensus by 40,000 jobs.A 34,000 surge in government jobs was...

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