Last Thursday, bulls used initial weakness in major equity indices owed to 4Q22 productivity report as an opportunity to buy. Friday, they bought more. More gains are likely ahead. Fed funds futures are very volatile. Traders are actively reacting real … Continued
Leading up to the 4Q22 earnings reporting season, the sell-side continues to wax enthusiastic about this year’s earnings prospects. The enthusiasm looks improbable considering the meaningful rise in interest rates last year is all set to filter through to the … Continued
Gold peaked last August, before beginning a strong downtrend. Amidst this, gold bugs have put their foot down at dual support, rallying the metal the last two weeks. Important resistance lies ahead. Real yields likely come to gold’s aid in … Continued
Two months into the year, January and February have traded similarly – early strength followed by weakness in the dying sessions. Equity bulls’ inability to hold on to gains comes amidst a spike in long rates. Short rates are behaving, … Continued
After repeated tries for months now, the 10-year Treasury yield finally broke through one percent on Wednesday. After Democrats won the two runoff Senate races in Georgia, markets are betting on more fiscal stimulus in quarters to come. Bond bears … Continued
Foreigners in the aggregate have been dumping Treasury notes and bonds. The Fed has been buying these securities, but less and less so. Given the soaring budget deficit and the need to issue new debt, the status quo cannot continue. … Continued
Of late, the U.S. dollar has defied expectations. Since peaking at 103.82 early January last year through Thursday’s intraday low, the US dollar index (89.23) dropped 15 percent. This was a period in which U.S. economic fundamentals have been decent … Continued
Chart 1 plots dividend yield for the 10 S&P 500 sectors. The data is as of 2Q16, hence financials still include real estate, which last month became a sector within its own right. The chart also includes buyback yield for … Continued
The following are futures positions of non-commercials as of February 23, 2016. Change is week-over-week. 10-year note: Negative interest rates have suddenly become the topic du jour. Last month, Japan waded into negative interest rate policy (NIRP). This was totally … Continued
The following are futures positions of non-commercials as of February 9, 2016. Change is week-over-week. 10-year note: On June 5, 2014, the ECB cut the deposit rate for the euro zone’s commercial banks to minus 0.1 percent from zero. It … Continued