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‘Anything Without A Cusip’
Let’s assume we are in fact late-cycle. Some folks will tell you that’s not the case and they’ll roll out all kinds of cherry picked metrics to support their contention that “mid-cycle” is a better description of where things stand. One thing worth noting about those arguments is that they are incomplete if the person making them doesn’t at least acknowledge that central banks are the X-factor here – if we aren’t late cycle it’s only because central banks are keeping things in limbo. The goal posts keep getting moved. It’s no longer clear what it is central banks are targeting. It’s a never-ending fight to achieve someth... -
Finance 0
NEO Cryptocurrency Coin Started Another Mega Rally?
Cryptocurrency NEO, which is also known as the Chinese variant of Ethereum, rose a spectacular 50% today. Although not visible on this chart it touched $45 USD per coin a couple of hours ago. Note that NEO was trading at $25 USD on November 1. According to Wikipedia NEO tries to create “a financial system that will combine real assets in the digital world.” That is of course a real-life problem, and a serious challenge (read: opportunity) on the blockchain. So if NEO manages to solve this it will be a multi-bagger. It is very hard to assess how well advanced NEO is with their technological advancement. Their website is not revealing a... -
Finance 0
Philippines GDP Growth Exceeds Expectations: ETFs In Focus
The Philippines witnessed impressive economic growth in the third quarter of 2017. Per the National Statistics Agency, GDP grew 6.9% year over year in the third quarter compared with 6.7% in the prior quarter and 7.1% in the year-ago period. It also beat a Bloomberg forecast of 6.6%. The Philippines has been one of the best performing economies in Asia so far this year. Growing exports and increased government spending contributed to GDP growth. Government spending increased 8.3% year over year. Consumer prices increased 3.5% year over year in October, a three-year high, bringing the average inflation so far this year to 3.2%. The figure al... -
Finance 0
Yuan Likely To Consolidate As PBOC Maintains Neutral Monetary Policy
Fundamental Forecast for CNH: Neutral The PBOC will continue the current monetary policy, which has neutral impact to the Yuan. The regulator watches capital flows and told it would counter against cycles through FX market. A high level of broad credit and soaring real-estate prices prevent the PBOC to cut rates. The Chinese Yuan gained against the U.S. Dollar and six other G10 currencies this week, while it lost to the Japanese Yen, Euro and Swiss Franc. Looking forward, China will have a light calendar next week after major October prints have been released; the focus is now shifting to Chinese regulators’ monetary and financial po... -
Finance 0
European Junk Bonds Now Yield More Than U.S. Treasuries
On Friday, the small caps outperformed the mega caps as the Russell 2000 – RUT was up 0.40%, while the Dow was down 0.43%. In the midst of this middling action, the JNK high yield bond index was down 0.05% and the HYG high yield bond index was down 0.03%. The chart below shows the recent action in the European high yield bond index. It has been selling off more sharply than American junk bonds in the past few weeks. As you can see, the 6 week stretch where the European high yield bonds had lower yields than U.S. treasuries has ended with a spike in European junk bond yields. Obviously, that was a weird stretch because U.S. treasuries ha... -
Finance 0
Tracking The Bear – Nov. 17
Last week, I discussed the potential year-end setup for a January correction. To wit: “It is the turn of the calendar where I see the potential for a bigger correction. Come January, I think there is a high-likelihood of ‘tax selling’ by fund-managers to lock in gains, particularly if ‘tax reform’ legislation has passed, as taxes won’t be due for 21-months (assuming late filing.) That selling, combined with concerns over the Fed’s rate hike in December and reduction of the balance sheet, could facilitate a deeper correction of 3-5%.” Chart updated through Friday Two things occurred this past week: Last week, I stated the i... -
Finance 0
Emerging Markets: What Has Changed – Nov. 17
In the EM equity space as measured by MSCI, Korea (+4.2%), South Africa (+3.2%), and Thailand (+1.9%) have outperformed this week, while Egypt (-5.1%), Turkey (-1.9%), and Russia (-1.8%) have underperformed. To put this in better context, MSCI EM rose 0.7% this week while MSCI DM fell -0.3%. In the EM local currency bond space, Malaysia (10-year yield -13 bp), South Africa (-13 bp), and Colombia (-12 bp) have outperformed this week, while Turkey (10-year yield +22 bp), Lebanon (+19 bp), and Peru (+12 bp) have underperformed. To put this in better context, the 10-year UST yield fell 5 bp to 2.35%. In the EM FX space, ZAR (+2.3% vs. USD), KRW... -
Finance 0
US Dollar: Politics To Overshadow Yellen Speech, FOMC Minutes
Fundamental Forecast for the US Dollar: Neutral US Dollar pressured as “Trump trade” narrative continues to fizzle Politics to overshadow Yellen speech, FOMC minutes, PMI surveys Holiday liquidity drain might amplify volatility on major news-flow The US Dollar continued to retreat last week as the prospect of expansionary fiscal policy that boosts inflation and nudges the Fed into a steeper rate hike cycle continued to fade. Lawmakers in the House of Representatives passed a version of tax reform that substantially differs from the Senate version – especially after the latter baked in repeal of “Obamacare” – signaling a treach... -
Finance 0
Shrinking Home Sizes: Downtrend Continues
New home sizes peaked between 2014 and 2015. A distinct down-sizing is now underway. What’s going on? The National Association of Homebuilders (NAHB) reports Declining New Home Size Trend Continues. After increasing and leveling off in recent years, new single-family home size continued along a general trend of decreasing size during the third quarter of 2017. This change marks a reversal of the trend that had been in place as builders focused on the higher end of the market during the recovery. As the entry-level market expands, NAHB expects typical new home size to fall as well. According to third quarter 2017 data from the Census Qu... -
Finance 0
Uranium Stocks In 2018: Pressure Cooker Ready To Explode
In line with our uranium forecast for 2018 we observe this week a potentially very bullish evolution both in uranium stocks as well as in uranium’s spot price. If this trend continues 2018 could become a hugely bullish year for uranium stocks. First, uranium’s spot price rose with 15 percent this week. Note the steep rally on the small chart. That caused uranium stocks to rise sharply this week. Guess what, most leading uranium stocks are just 10 percent away from a mega-bullish breakout. Will uranium stocks in 2018 break out from a 7-year bear market? Admittedly, we are starting to get excited, presumably too early. Be that as it may,...
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