During the week of February 21, 2017, Money Managers (MGR) in the WTI futures market went all the way for higher oil prices. The CFTC Commitment of Traders (COT) report showed a then-record 405k net to the long side. For whatever reason(s), oil prices didn’t necessarily follow at least not in the same nearly direct manner as they had in [...]
There are a lot of reasons why interest rates may have risen recently. The federal government is expected to post a larger deficit this year - and in future years - due to the tax cuts. Further exacerbating those concerns is the ongoing shrinkage of the Fed's balance sheet. Increased supply and potentially decreased demand is not a recipe for [...]
The risk budget changes this month as I add back the 5% cash raised in late October. For the moderate risk investor, the allocation to bonds is still 50% while the risk side now rises to 50% as well. I raised the cash back in late October due to the extreme overbought nature of the stock market and frankly it [...]
Last year’s infatuation with globally synchronized growth was at least understandable. From a certain, narrow point of view, Europe’s economy had accelerated. So, too, it seemed later in the year for the US economy. The Bank of Japan was actually talking about ending QQE with inflation in sight, and the PBOC was purportedly tightening as China’s economy appeared to many [...]
Chinese exports rose 12.9% year-over-year in April 2018. Imports were up 20.9%. As always, both numbers sound impressive but they are far short of rates consistent with a growing global economy. China’s participation in global growth, synchronized or not, is a must. The lack of acceleration on the export side tells us a lot about what to expect on the [...]
The yield on the 10 year Treasury note briefly surpassed the supposedly important 3% barrier and then....nothing. So, maybe, contrary to all the commentary that placed such importance on that level, it was just another line on a chart and the bond bear market fear mongering told us a lot about the commentators and not a lot about the market [...]
How quickly things change in these markets. In the report two weeks ago, the markets reflected a pretty obvious slowing in the global economy. In the course of two weeks, what seemed obvious has been quickly reversed. The 10-year yield moved up a quick 20 basis points in just a week, a rise in nominal growth expectations that was mostly [...]
There is no change to the risk budget this month. For the moderate risk investor, the allocation to bonds is 50%, risk assets 45% and cash 5%. Stocks continued their erratic ways since the last update with another test of the February lows that are holding - for now. While we believe growth expectations are moderating somewhat (see the Bi-Weekly Economic [...]
The market volatility this year has been blamed on a lot of factors. The initial selloff was blamed on a hotter than expected wage number in the January employment report that supposedly sparked concerns about inflation - although a similar number this month wasn't mentioned as a cause of last Friday's selling. The unwinding of the short volatility trade exacerbated [...]
There's something happening here What it is ain't exactly clear There's a man with a gun over there Telling me I got to beware I think it's time we stop, children, what's that sound Everybody look what's going down There's battle lines being drawn Nobody's right if everybody's wrong Young people speaking their minds Getting so much resistance from behind [...]
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