There is no change to the risk budget this month. For the moderate risk investor, the allocation between risk assets and bonds is unchanged at 50/50. The performance of markets in the first quarter of the year was a bit schizophrenic. Stocks performed well which one might interpret as a reflection of improving economic growth prospects. Certainly President Trump and [...]
The oversized base effects of oil prices could not in February 2017 push up overall US imports. The United States purchased, according to the Census Bureau, 71% more crude oil from global markets this February than in February 2016. In raw dollar terms, it was an increase of $7.3 billion year-over-year. Total imports, however, only gained $8.4 billion, meaning that [...]
For the first time in three years, oil inventories in the United States are not rising precipitously more than the seasonally expected. At the start of both 2015 and 2016, oil stocks exploded higher as oil prices crashed, all related to the “dollar” flex on the front end of the futures curve creating sufficient contango necessary to strip that oil [...]
It has been out of hand for some time, but the longer it goes the further from sense it can get. Today’s news is apparently about a bipartisan effort for $1 trillion in “stimulus”, as if the last $1 trillion in “stimulus” had never happened. Apparently eight years is enough for memories to have been expunged, or as if IRS [...]
Industrial production continued its slow, shallow contraction, unusual in any economic climate but perhaps more compelling here in describing the different direction markets are taking. Clearly, as discussed several times before, certain parts of certain markets are betting that different is going to be effective where the same old was clearly not. The actual economy, however, has yet to show [...]
The Chinese yuan fell again in Monday Asian trading, breaking below 6.70 for the first time. Not surprisingly, the tone to broad early trading in Europe and the US was slightly negative on what would be negative “dollar” factors. I have surmised for some time that Japanese banks have been the primary “dollar” supply for Chinese “dollar” needs, so it [...]
Industrial production in the United States remains caught up in the latest downward shift of the 2012 slowdown. The Federal Reserve estimates that overall industrial production contracted for the 10th straight month, falling 0.7% in June 2016. The degree of decline is relatively small, but as with so many other accounts the lingering of the condition for an only increasing [...]
Even before the Brexit vote, momentum was shifting to defensive sectors. The rally in weak dollar sectors - other than the gold/silver mining industry - was looking very overbought and tired anyway, so Brexit was a good excuse to take some profits. Whether the dollar can retain the strength it has gained on this historic vote is the big question. [...]
It makes for yet another huge dichotomy, but one which is curiously absent from any mainstream commentary. As noted earlier today, Chinese imports were pleasantly surprising for the mainstream as they were just about flat year-over-year. The fact that oil imports surged by nearly 40% seemed only to confirm that whatever might be happening on the export side (another dichotomy [...]
Chinese imports fell for the 19th consecutive month in May, but it was the pace of the latest decline that has stirred (yet again) so much optimism. Year-over-year, Chinese imports were down just 0.4%, beating expectations for a 6% drop. From that, as you can guess, the media is awash in commentary that “stimulus” is working, meaning the recovery is [...]
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