What if? What if China proceeds to reduce its purchases of Treasury securities? At $1.18 trillion, it is the largest holder. Japan – at $1.08 trillion – is close second. The U.S. Treasury market is $14.2-trillion strong (chart here). On … Continued
The sell side is on the move. We just got the first taste of how bottom-up analysts view the recently passed tax cuts will impact corporate earnings. Last Friday, operating earnings estimates for S&P 500 companies were revised higher by … Continued
U.S. 10-year Treasury yields peaked in September 1981 at 15.8 percent, then dropped all the way to bottom at 1.34 percent in July 2016. Some bull market in bonds! On an absolute basis, the 10-year is still trapped in a … Continued
Thanks to faster growth in the second half last year, inventory is getting wrung out of the system. It is probably only a matter of time accumulation occurs again. In 3Q17, U.S. real GDP grew at an annual rate of … Continued
Following futures positions of non-commercials are as of January 9, 2018. 10-year note: Currently net short 196.9k, up 121k. Is this the big one? The big breakout in 10-year Treasury yields, that is? The 10-year has been trapped in a … Continued
U.S. corporate bond issuance hit a new record last year. Issuance totaled $1.63 trillion, up 6.9 percent over 2016. This was the fastest growth rate in five years, and also the eighth consecutive year of trillion-plus issuance (Chart 1). Investment-grade … Continued
Here is a brief review of period-over-period change in short interest in the December 16-29 (2017) period in nine S&P 500 sectors. XLB (SPDR materials ETF) Already up 3.2 percent for the month/year, XLB (62.47) stayed with the daily upper … Continued
A trade with a neutral to bullish bias may be brewing in utilities. Since peaking at $57.23 on November 15 last year, XLU (SPDR utilities sector ETF) came under severe pressure – down 10.8 percent through last Friday’s low of … Continued
A P/E of 17x on the S&P 500 large cap index cannot be called euphoric. A little above average, sure, but not euphoric. On forward operating earnings using next year’s estimates, that is what the index is currently trading at. … Continued
Stocks in general essentially began 2018 where 2017 left off. Take financials. XLF (SPDR financial sector ETF) was up 20 percent last year. In the first four sessions this year, it is up another 1.8 percent. Although major indices have … Continued