In discussing the dynamics behind the U.S. bond market early this week, an important variable got left out. The chart below plots the budget situation of the U.S. government against issuance by the Treasury of notes and bonds. This gives … Continued
As 2014 began, growth expectations were very high for the U.S. economy. In fact, every year since the recession ended mid-2009, economists’ GDP forecasts have been on the optimistic side, only to be progressively cut back as the year progresses. … Continued
One valuation tool equity bulls consistently use to justify current stock valuations – as well as to argue for further multiple expansion – is by comparing bond yield to earnings yield. There is a metric known as ‘bond equity earnings … Continued
The phrase quantitative easing elicits diverse reaction. For some, QE was what saved the U.S. economy post 2007/2008 crisis and boosted both housing and stocks. For others, all it did was create this huge asset inflation, and further widen the … Continued
The euro has been in an incessant rally mode since July 2012, and particularly since July 2013. This has surprised a lot of observers as this has come in the face of what in ordinary circumstances could/should have resulted in … Continued
The 1Q14 GDP print was a shocker, to say the least! Real GDP inched up a mere 0.1 percent SAAR, versus consensus expectations of 1.2-percent expansion. Sure, it is the advance estimate, with two more still to come. Sure it … Continued
The release of February’s commercial and industrial loan data ensued a lot of excitement. ‘Finally!’ was the typical reaction. The $36bn increase (to $1.67tn) was the largest month-over-month rise since October 2008. March data just came out, and we learn … Continued
One of the common themes that we so often hear is that there is a lot of dry powder still left to push stocks higher. Bulls have been steadfast in holding on to their gains. Yes, there were sell-offs in … Continued
After having flashed decent enough of a signal last week that volatility was ready to move lower – hence higher odds of higher equity prices – the VIX has indeed pulled back. Equities are rallying; volume could be better, but … Continued
There was a lot of excitement early this week after U.S. retail-sales data were released. At 1.14 percent, month/month change in retail and food services was the highest since September 2012. ‘Motor vehicles & parts dealers’ helped a great deal … Continued