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
Corporate bond issuance was strong in the first half. High-yield, in particular, is on course for yet another record year. The Fed essentially provided a backstop to corporate bonds in March last year, setting ablaze risk-on sentiment. Corporate profits are … Continued
Last week, the FOMC slightly tilted hawkish. Repercussions were felt across assets. Then early this week, dovish members were out in full force, pacifying investors that monetary morphine is here to stay; major equity indices are back at/near their highs. … Continued
Last week, Fed officials threw cold water on incipient taper talk, making it clear they would continue to purchase treasury securities. This followed a backup this month in rates in the long end of the treasury yield curve, with the … Continued
The FOMC meets this week. The Fed already has unlimited QE in place. Not much is expected to come out of this meeting. If anything, aware that low rates are needed, Mr. Powell may drop a hint or two that … Continued
In the midst of a flattening yield curve, the 10-year T-yield is once again hammering on resistance at just north of three percent. Just a month ago, these notes yielded 2.81 percent. At least a pause is due, raising the … Continued
On the weekly chart, SPY remains grossly overbought, but near term there is room to rally – duration and magnitude notwithstanding. Options can help. US core PCE (personal consumption expenditures) increased 1.96 percent year-over-year in May – essentially two percent. … Continued
The U.S. sovereign bond market has hit the headlines a lot these days. Rates have rallied big since September 2017 lows, but from suppressed levels, and are at crucial stage technically. At least near term, fundamentals do not allow for … Continued
The financial accounts of the U.S. for 2Q17 was published last Thursday. Better known as the Z.1 report, the massive quarterly publication contains tons of useful data – thus highly recommended. The seven charts below try to highlight where things … Continued
One of the hallmarks of post-Great Recession recovery has been subdued capital expenditures. In 2Q16, real non-residential fixed investment was $2.19 trillion (at a seasonally adjusted annual rate) – essentially flat since 3Q14. Investment peaked at $2.22 trillion in 3Q15. … Continued