On June 26, the 10-year generic German yield closed at 24.5 basis points. It finished last week a little over 57 basis points. The similar Italian yield has risen 45 basis points to 2.05%. The short-end of the yield curve is constrained by the negative 40 basis point deposit rate. The steepening of the yield curve offsets the price erosion of banks’ bond holdings, and bank share price (in the Dow Jones Stoxx 600) have risen five percent during this period dramatic increase in long-term interest rates). The ECB continues to try to calibrate its communication with the evolving economy and its risk assessment. It appears that the conf...
Earlier this year, we identified Blockchain as a top tech investing trend of 2017 and 2018 and shared with our readers how BTL Group has the potential to disrupt the way many sectors operate. We even compared it to having an Amazon-like upside potential (on the very long term of course), and flashed a buy opportunity 4 months ago when it was trading at $2.30. Two weeks ago, the price dropped sharply to test the support level at $4. That’s when we issued another entry signal for those who missed the previous ones. We still think our $9 target could be achieved later on this year or in 2018, provided there is no crash in the Blo...
Fundamental Forecast for CAD: Neutral An interest rate increase by the Bank of Canada on Wednesday is now highly likely. However, after the Canadian Dollar’s surge Friday, that’s probably priced in already. There has been plenty of disagreement among analysts over whether the Bank of Canada will increase its overnight rate to 0.75% from 0.5% on July 12. As I reported here, a rate rise was once seen as almost certain after hawkish comments by BoC Governor Stephen Poloz but doubts then set in. Those, though, were blown away Friday by a bumper labor-market report and now it would be quite a surprise if rates were left on hold. Friday’s d...
Last week, I discussed the issue of “lots of volatility with little movement” stating: “The last couple of weeks have experienced a sharp rise in price volatility. While stocks have vacillated in a very tight 1.5% trading range since the beginning of June, there has been little forward progress to speak of. However, notice that support at 2415 (50-dma) has remained solid as ‘robots’ continue to execute their program of ‘buying the dips.’” “This lack of progress keeps us ‘stuck’ with respect to portfolio positioning.” I remain very cautious on the overall market, currently, and the deterioration is leadership...
Here are my forecasts for upcoming economic data. Forecast Prior Observation Consensus Week of July 10 July 10 Consumer Credit – May $13.5B 8.2 14.6 July 11 NFIB Small Business Optimism Index – June 104.5 104.5 104.5 JOLTS – May 5.950M 6.044 5.975 Wholesale Inventories – May 0.3% 0.3 (p) 0.3 July 13 Initial Unemployment Claims 242K 248 Producer Producer Index – June 0.0% 0.0 0.0 Core PPI (less food, energy and trade services 0.2 -0.1 0.2 Treasury Budget ...
VIX had an inside week, after challenging mid-Cycle resistance a third time in three months. It closed above Short-term support at 10.60 and is on an aggressive buy signal. Once above the upper trendline of the Ending Diagonal formation, it has the distinct probability of reaching the August 2015 high at 53.29. In other words, a complete retracement is possible. (CNBC) It shouldn’t be too surprising that the XIV exchange-traded note, which is designed to deliver the inverse performance of the well-known CBOE Volatility Index (or the VIX) on a daily basis, is attracting fresh attention after surging as much as 87 percent this y...
All economic policies have unintended consequences. The decentralization of healthcare finance and policy proposed by congressional Republicans is no exception. The Better Care Reconciliation Act (BCRA) pending in the Senate would sharply shift responsibility for healthcare toward the states. Some of the biggest changes would come in Medicaid. would sharply cut federal spending, leaving states with the choice of responding by increasing their own contributions to maintain current enrollments, or by reducing coverage. Aside from Medicaid, they would gain the right to redefine the essential services insurance must cover, to experiment with high...
Speculators in the futures market made several significant position adjustments in the CFTC reporting week ending July 4, despite it being a holiday-shortened week. The gross adjustments were mostly to reduce long dollar exposure and increase short dollar exposure. This accounted for a full three-quarters of the speculative position adjustments. There were four significant position adjustments, which we define as a change of 10k contracts or more in the gross speculative exposure. Three of these were changes in the gross short positions. The bears covered 12.5k previously sold euro contracts, reducing the gross short position to 108.5k contra...
Deals and Financings BeiGene (NSDQ: BGNE) of Beijing has entered a “transformational” collaboration with Celgene (NSDQ: CELG). The agreement, which involves BeiGene’s clinical-stage PD-1 immuno-oncology drug, has a total value of almost $1.4 billion, setting a record as the largest out-licensing of a China discovered novel drug candidate (see story). Celgene will own global rights to BeiGene’s BGB-A317 immuno-oncology drug, except for Asia, though it will own Japan rights. In return, Celgene will pay $263 million upfront and make a $150 million equity investment in BeiGene. The agreement provides for up to $980 mil...
So obviously, deglobalization is a terrible idea. It’s a step backward in time. It represents the devolution of society into tribalism, nationalism, xenophobia, etc. In short: it’s dumb. As in literally dumb. It’s evidence that we are, as a global community, actually getting stupider in terms of our ability to identify as human beings first and Americans, Russians, French, Chinese, etc. second. Which helps to explain why the people who support deglobalization seem to be unhinged, stupid, or in some cases both. Part of the anti-globalist agenda pursued by the Trump administration involves choking off global trade. Not to put too fine a p...