Information = Edge
The immediate term tailwind for USD following passage of the 2017 Tax Reform and Jobs Act is transitioning to a more neutral impact, while simultaneously, longer-term structural debt problems will gradually (and then suddenly) enter the spotlight negatively for USD over the coming 3-5 years.
Risk appetite levels are trapped between slowing global growth and monetary policy countercyclical measures, also known as the “Fed Put” or “Central Bank Put.”
Margin contraction fears are creeping into Pro-forma Income Statements after hovering comfortably deep into double-digit territory as recently as 3Q2018.
“Before 2008 nobody knew what quantitative easing was. Now it is in the common vernacular. High school students know what QE is. People will come to grips with what is called debt monetization. And that’s different from QE. “
The final OPEC+ cut deal of 1.2M bpd from an October baseline was applauded as a “larger than consensus” cut. It was only larger than the lowered estimate provided the day before by al-Falih.
While foreign central banks and investors have held steady their nominal ownership of UST’s, they are not keeping pace with the increasing stock on a percentage basis.
September trade data out of China might indicate a surge of temporary goods purchases in anticipation of another bump up in tariff rates. If so, this will feed into an abnormally high inventory buildup in the United States during the autumn period that will fall off a cliff early next year whether there are higher tariffs or not.
We are looking at a confluence of negative catalysts for global equities in the near term. This time around it does not exclude US equities. As I have covered for an extended period, we eventually anticipate an inflationary public policy response earlier and more aggressively than would have occurred in prior times to any material economic contractions. This is due […]
It indicates that, if anything, the risk to changes in current market expectations is to the upside in terms of a potential rate hike by early summer 2019 rather than after the summer.
JGB’s Join the Higher Bond Yield March with a Bout of Bear Steepening Concentrated at the Long End The risk/reward prospects of owning longer-dated government bonds from current historically suppressed levels are as attractive as a bucket of dry sand after a sweaty jog. As Bloomberg notes, Japan’s bond market is enduring pressure due to recent BOJ policy adjustments. Japan […]
Public official intentions on both the left and the right suggest the conditions underpinning populist political forces will continue.
You invest in the markets of the future not the markets of the past. It is time to start expecting a more inflationary future led by both left and right populist political leaders.
On May 8th, Assist FX expressed caution in prematurely poking the seafloor for a bottom in the paper gold market: “Gold is not yet a clear buy as one might suspect with higher inflation. This is due to the risk of sharply higher interest rates still on the table. Higher real interest rates are an enemy to gold. We see […]
Here is a look at equities that are expected to be highly sensitive to global trade negotiation developments between China and the US per a recent Goldman Sachs report via CNBC. First, some names with high revenue exposure to Greater China (mainland, Taiwan, Hong Kong): Second, some names with the least amount of direct China exposure whose revenues are resoundingly […]
Our thesis was driven by fiscal math gravity facing government budgets and game theory analysis for how central planners would react to it.
Total return on US investment grade (IG) corporate bonds has been negative all year. Half of IG bonds are rated BBB, which is one notch above junk. Deteriorating corporate credit conditions and upside inflation surprises suggest a poor risk/reward for incremental capital allocated to US IG bonds. This chart can be found here:
