The high yield new issue market came roaring back to life last week according to Bank of America’s credit strategists Michael Contopoulos and team, but despite record levels of new issuance, it appears investors are turning away from high yield credit market. Cracks Start To Show In High Yield As Investors Turn Cautious For the week to Thursday 9 March $17.3 billion of new high yield issuance was priced, the largest volume in two years. However, while the market excepted this new issuance, outflows, specifically ETF outflows, have caused spreads to widen. BOA’s high yield credit team writes: “Last week was one of the busiest of the yea...
We have been arguing for a long time that the 115.00 level remains the separating line between dollar rally and dollar failure. Tomorrow the market will get to test that thesis as the market get ready for FOMC day. Last Friday’s Non-Farm Payrolls confirmed the US growth continues unabated. The economy generated 235,000 jobs versus forecasts of 196,000. Even the unemployment rate declined for the right reasons as more individuals sought jobs rather than abandon the workforce. Although wage growth was slightly tepid at 0.2% versus 0.3%, it still remains on pace to grow at more than 2% this year. All of this data should make traders confident ...
Europe is in the spotlight this year thanks to a series of elections and referendums. In particular, the Netherlands is the first country to hold general election on March 15. The race for the position of the Dutch Prime Minister between Geert Wilders, a leader of the populist Party of Freedom (PVV), and the incumbent Prime Minister Mark Rutte, who leads People’s Party for Freedom and Democracy (VVD) is on a knife-edge. This is especially true given that Wilders, whose popularity surged in recent months, appears to have lost momentum in the final week, falling behind Rutte’s party with 22 seats compared with 25 in early March, as per th...
It is that time of year when the markets play second fiddle to debates about which twelve seed could be this year’s Cinderella in the NCAA basketball tournament. For college basketball fans, this particular time of year has been dubbed March Madness. The widespread popularity of the NCAA tournament is not just about the games, the schools, and the players, but just as importantly, it is about the brackets. Brackets refer to the office pools based upon correctly predicting the 67 tournament games. Having the most points in a pool garners office bragging rights and, in many cases, your colleague’s cash. Interestingly the art, science, an...
Audio Length: 00:53:48 On last week’s podcast, I had the opportunity to interview Jared Dillian, author of the professional investing newsletter “The Daily Dirtnap” and a writer for Mauldin Economics, as well as Marc Chandler of Brown Brothers Harriman (BBH), a specialist on currencies. First, before I get to the discussion with the two guests: We heard from our co-host, Professor Jeremy Siegel, who was surprised that U.S. Federal Reserve (Fed) Chair Janet Yellen was giving the all-clear that the Fed would raise interest rates ahead of March 10’s key employment rate figure. He speculated that Yellen had received a preview that the...
Audio Length: 00:36:56 Leigh Drogen, and SVP of Media, Christine Short, are joined by Nick Colas, Chief Market Strategist at Convergex. With the markets anticipating that the FOMC will raise rates at Wednesday’s meeting, we explore all things related with the Federal Reserve. Topics include a discussion around the probability of 3 hikes this year as the Fed suggested, whether the US economy can handle resulting inflation (or if raising rates truly does spur inflation), and the impact that may be seen on markets, commodities and the consumer....
Having sent crude oil pries tumbling overnight by admitting they cheated on OPEC production cuts, Saudi officials are desperately trying to unwind that faux pas by claiming the over-production was purely for domestic storage. The problem with this “explanation” is that Saudi deliveries to China soared in January… Bloomberg reports that Saudi Arabia didn’t raise supply to the international oil market in February, according to a person familiar with the kingdom’s oil policy. The OPEC member increased the volume of oil in storage at domestic refineries and terminals last month, says the person, asking not to be identi...
“Technically Speaking” is a regular Tuesday commentary updating current market trends and highlighting shorter-term investment strategies, risks, and potential opportunities. Please send any comments or questions directly to me viaEmail, Facebook or Twitter. As I noted last week, the “Ides Of March” is upon us and there is a LOT of stuff going on that could send ripples through the market. Here is a brief listing of the key events to watch out for: The most important, if mostly priced in, event is this FOMC announcement on Wednesday where Traders view a quarter-point Fed hike this week as a virtual certainty and will be wa...
During Thursday’s press conference, Draghi sounded more hawkish than usual. What does this imply for the gold market? As we wrote on Friday, Draghi adopted a more optimistic tone during the press conference. First of all, he provided more upbeat economic projections and praised the improvement in the labor market, the decrease in cross-country heterogeneity, and the significant progress on the inflation front. He even argues that “risks of deflation have largely disappeared”, what was probably the most important phrase of the press conference. Moreover, Draghi said that the risks had diminished (“the balance of risk has improved cer...
The most interesting thing in markets today is the growing divergence in short-term interest rates between the U.S. and the rest of the developed world. While Japan and most of Europe have negative 2-year yields, the U.S. 2-year Treasury yield has moved all the way up to 1.38%, its highest level since 2009. At 0.71%, the U.S. 1-month Treasury bill has a higher yield than 10-year German bunds (0.45%). What accounts for this massive differential? Central Bank policy, with the U.S. being the only developed country in the world in a tightening cycle. This week the Fed is expected to raise interest rates for the third time since December 2015. In ...