Economic Reports Scorecard The economic data since my last update has improved somewhat. It isn't across the board and it isn't huge but it must be acknowledged. As usual though there are positives and negatives, just with a slight emphasis on positive right now. Interestingly, the bond market has not responded to these slightly more positive readings with nominal and [...]
There hasn't been a lot of change in our indicators since the last update and therefore, despite my discomfort with the altitude of this stock market, there are no changes to the Global Asset Allocation this month. For the moderate risk investor, the allocation between risk assets and bonds is unchanged at 50/50. Bond markets moved around some during the [...]
With JPY pushing above its recent resistance (for whatever might have caused it), it is useful to determine if that is an idiosyncratic change or whether there are other “dollar” indications that support a possible breakout. This is especially true given what I think is causing the move in JPY, namely that “reflation” had been initially predicated on ideas of [...]
As noted earlier, the Bank of Japan has a whole host of problems over its QQE with YCC attachments. Japan’s central bank has belatedly discovered Finance 101, where being one-dimensional doesn’t actually help the cause of “stimulus.” For far too long official policy has been lower, lower, and lower, whether that was carried out in JGB yields or whether it [...]
The Bank of Japan had announced another acronym with which to add to QQE, a term that already includes an extra “Q”, on September 21, 2016. It was a bizarre engagement, like something out of a TV advertisement for laundry detergent or diet supplements where the central bank marketed the same QQE that you always knew and loved but now [...]
In the aftermath of the “rate hike” in December, there was a rush to quantify, as far as expectations of political considerations may be attainable in such format, just how much the Fed would further “hike” in 2017 as a distillation of how good they figured the economy to be. As overall “reflation”, however, that was more of a media [...]
Economic Reports Scorecard Well it's time to get back in the habit of doing this every two weeks. The schedule was interrupted over the holidays and then again by my annual outlook piece. The economic data released over the last two weeks was not particularly inspiring, not that hard data is what has been egging on the old animal spirits. [...]
Market based expectations for growth and inflation have moderated slightly since the last update. Since mid-December, interest rates - nominal and real - have fallen back, the yield curve has flattened, the dollar index has pulled back from its highs and gold has moved off its lows. In short, the Trump trade is being partially reversed as it dawns on investors [...]
The biggest problem with “reflation” is that it doesn’t live up to what the word is supposed to mean. That has been true in each of the past attempts at it, but is even more the case in this latest one. Yet, to hear it described is as if we are the verge of an explosion in growth unparalleled at [...]
The FOMC minutes published today for the December 2016 policy meeting are being shopped around in much of the mainstream as “hawkish”, or at least a continuation of the “reflation” impulse. The commentary related to the more detailed window into the last monetary policy decision is being framed as if more so to that upside. Policymakers were clear that the [...]
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