Post-November jobs report this morning, we are seeing some weird reaction in the bond market. Two-year yields have gone up more vs. the 10-year. As a result, the curve is flatter. In fact, as shown in the chart, the curve … Continued
Healthy U.S. non-farm employment versus ultra-low civilian labor force participation rate: Notwithstanding September weakening, job openings has tracked job creation very well: Despite improvement in job creation, wage growth continues to be a dud: Belt-tightening continues in federal payroll — … Continued
Balance sheets have diverged between Fed and ECB As eurozone economy/inflation fall short, ECB under pressure to do QE If there is no QE from ECB, euro probably has a lot of catching up to do on the upside There … Continued
Facing lower earnings, several oil companies already plan to cut 2015 capex U.S. energy sector accounts for whopping one-third of S&P 500 capex Given drop in oil price, ‘15 S&P 500 EPS estimates too optimistic Oil’s sharp drop can reverberate … Continued
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2014 on track for 3rd successive year of $300bn-plus high-yield issuance; energy 15% of junk market By not cutting 30mn bpd production target, OPEC ready to lock horns with shale oil As both sides play game of ‘who will blink … Continued
My essay was featured in this week’s Evergreen Virtual Advisor of Evergreen Gavekal (@EvergreenGK). The theme is the amount of divergences and disconnects out there and what it could mean for the markets. EVA+11.28.2014
Velocity of money one of two components to determine GDP Six years into U.S. economic recovery, velocity remains way suppressed Inability of velocity to rise during monetary expansion raises disinflation/deflation risks It is troubling how this late into the cycle, … Continued
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