The S&P 500 briefly hit 3,000 today — something that has never happened in history – before closing slightly below this level. Can the markets keep on roaring higher purely on the hope of favorable monetary policy? Not unless the Fed plans to embark on a new rate-cutting cycle — a “one and done” move […]
As monetary authorities around the world race to make things “easier” and provide almost unlimited liquidity in the face of decelerating growth, they are getting very little help from government bureaucrats. Many, like the International Monetary Fund, have gone so far as to suggest that it is massively irresponsible to rely so heavily on monetary policy alone.
Italian bonds traded significantly higher earlier in the week as the Italian coalition government pledged to meet a lower budget deficit target in 2019. Despite the debate over whether or not this actually represented financial discipline or a series of one-time revenue windfalls, the market reacted positively.
Everything in moderation. We believe this phrase applies to the “safety trade” as well. Recently, we have seen many strategists/traders suggesting that they are positioning equity portfolios using a “barbell” approach – pairing aggressive momentum names (including IPOs) with lower-BETA defensive stocks (Utilities, Consumer Staples, REITs) — primarily as a way to deal with market […]
Perhaps just a coincidence, but two of our recent posts have come together beautifully in a recent chart from Deutsche Bank depicting and supporting our view of how gold prices have moved almost in lock-step with the growing universe of negative-yielding bonds. There is no guarantee that any historical trend illustrated above will be repeated […]
“Boy, that double-digit yield looks pretty juicy….” We would advise caution. Often, double digit yields can be an indication that the market doesn’t believe the current distribution is sustainable. Usually, yields move higher as investors perceive more risk. In this way, a higher current return is delivered as a way of responding to those concerns […]
Since the end of May, gold has been on a run unlike we have seen in over five years – up 10.5%. The last time gold reached $1,400 per oz. was back in 2013. While silver (the other precious metal) is up 6.4% during that time as well, it continues to lag. Presently, the gold/silver […]
In their own way, Alliance Bernstein and Goldman Sachs seem to think so. Both published articles this week on CNBC. As we pointed out over a week ago, it is a fact that “Value” has tended to substantially underperform “Growth” over the last 10 years. Will there be a reversion to the mean, or is […]
Earlier last week, on the heels of the ECB’s “hint” that it would start easing again (or even more), an additional $714 billion of bonds achieved negative yields, sending the global total to a new record. It may be hard to believe, but around the world (mostly in Europe and Japan), roughly $12.5 trillion of […]
Many agreed that the Fed had a difficult challenge yesterday: Acknowledge the signals from lower bond yields around the world market without appearing to be kowtowing to markets; Demonstrate independence while reaching the same conclusion as the Trump administration; and Admit that growth is slowing and challenges to global economies are more acute without suggesting […]