Apparently, everyone is going to adopt on an oxymoron when describing their outlook for equities in 2018. As noted last week, there’s something not quite right about the term “rational exuberance.” “Exuberance” implies at least a little bit of irrationality in most cases and there is most assuredly some irrationality inherent in being “exuberant” about…
Despite rising equity markets, steady yields, positive economic data and the prospect of a Fed rate hike in December USD/JPY has done nothing but slide lower over the past few weeks. What gives? The problem for the pair is that the market remains skeptical about any further rate hikes in 2018. For now, the…
Bloomberg reports an astonishing bit of interest rate news from France. Mark Gilbert reports, French utility Veolia Environnement SA is one of a handful of low-rated borrowers — assessed at BBB or lower by Standard & Poor’s — with fixed-rate debt repayable in three years or longer that trades at yields below zero in euros. Fleckenstein…
The phrase ‘buy the rumor, sell the news’ is overused on Wall Street for a reason. Prior to significant events, prices tend to rise on rumors and then drop sharply following a highly anticipated event. Looking at WTI, the last OPEC meeting (May 25, 2017) is a great example of this pattern. Rumors of deeper…
If we’re going to discuss Asian equities in the context of “awesome”, we should begin with Tencent. Tencent, which has more than doubled this year, drove Asian stocks higher during Tuesday’s trading session. Trading on the main board of the Hong Kong Stock Exchange hit a 28-month high of HK$157 billion with one fifth of…
The “fatal flaw” of neoliberalism, which “denotes a preference for markets over government, economic incentives over cultural norms, and private entrepreneurship over collective action,” is that it simply is “bad economics,” according to a new Guardian article penned by Harvard economist Dani Rodrik. The one size fits all formula can be overly simplistic but that could be said…
According to an analysis by credit rating agency Moody’s, cash and liquid investments at US non-financial companies are poised to rise about 5% to $1.9 trillion at the end of 2017 — a new record. This cash pile is concentrated with five key holders, which together will own 35% (Apple will account for 15%) of the total, up from…
With today’s new highs, the S&P 500’s current bull market has extended to 3,179 calendar days dating back to March 9th, 2009. To surpass the record length for a bull market (20%+ rally without a 20%+ decline), there’s still a long way to go, however, since the longest bull lasted 4,494 days from 12/4/1987 through…
Indicators for financial market “stress” have reached their lowest levels in decades. For instance, stock market volatility has never been this low since the early 1990s. Credit spreads have been shrinking, and prices for credit default swaps have fallen to pre-crisis levels. In fact, investors are no longer haunted by concerns about the stability of…
Gold perhaps retains its reputation as the perfect store of value, especially during tough economic periods. Historically, the yellow metal has demonstrated its ability to act as a haven when stock markets are bearish. As such, gold prices tend to rally during a recession and fall during bullish markets. The price of gold has also…
