Via Moody’s: Who to Blame for the Flattening Yield Curve The U.S. economy is humming along, but we believe that the economy will weaken and likely fall into recession sometime in 2020 as the boost from the fiscal stimulus fades. There is considerable uncertainty in the timing of the next recession, but the U.S. bond
By Leith van Onselen Treasurer Scott Morrison has confirmed that the Turnbull Government will persist with its policy of progressively reducing the tax rate for all companies, claiming they are essential to fuel investment, jobs and wages growth. From The AFR: “We’ve had significant success already in delivering tax cuts for small and medium-sized businesses
All he needed to do was shut up. DXY up: AUD down across the board: Gold off: Oil held on: Base metals were mixed: Big miners rallied: EM stocks too: And junk: The Treasury curve flattened: And bund curve: Stocks took off: Trump managed to shut up for a day and China announced some minor
Some nice MSM panic today via Reuters: Whether China is reducing its vast holdings of U.S. Treasury bonds is a persistent question in global markets, and the recent escalation in trade tensions between the world’s two largest economies means the question is increasingly on investors’ minds. The U.S. Treasury’s latest report on international capital flows
Just in case you thought China had the upper hand in the trade wars owing to US politics. I’ve circled the resignation of Gary Cohn and the launch of the China trade war: Certainly not a vote loser if not yet a clear winner: Just hit 50% in the Rasmussen Poll, much higher than President
DXY firmed Friday night: AUD was mixed: But EMs are weak: AUD CFTC positioning fell a little: Gold rose: Brent too: Despite a climbing US rig count: Base metals were mixed: Miners firm: EM stocks weak: Junk firm: Treasuries soft: Bunds strong: Stocks stable: Syrian missiles upset the apple cart but there does not seem
Via Moody’s: Profits Growth Curbs Defaults First quarter 2018’s earnings season has arrived. Though the annual increase of corporate revenues is expected to slow from its pace of 2017’s final quarter, operating income is expected to quicken. Tax cuts and the containment of labor costs help to explain the expected improvement in operating leverage, or
DXY rose last night: AUD was mixed against EM: And EM: Gold got flogged: And base metals: Big miners fell: EM stocks firmed a touch: But junk is sending an interesting signal as US warms up but EM turns cold: The Treasury curve flattened again: Bunds went the other way: Stocks rose firmly: The key
DXY was stable overnight: AUD pulled back: Gold jumped and has a bullish chart but couldn’t break out: Oil too but it did breakout on geopolitics: China’s PPI sat on base metals: Big miners did OK: EM stocks too: And junk: The Treasury curve keeps on flattening: And bund curve: Stocks eased: You could be
DXY was sold last night: AUD was roughly stable against DM: But strong against EM: Gold firmed: Oil too: Base metals were mixed: Big miners weak: EM stocks too: Junk was better: The Treasury curve flattened: And bunds: Stocks soared then flamed out: Everyone is a bear or bear in waiting now. Last night’s bid
DXY fell Friday night: AUD went risk off anyway: Not as much as EM forex: Gold lifted: Oil was hit as the US rig count jumped 11 to 808: Base metals were mixed: Big miners fell: EM stocks too: Junk held on: Treasuries were bid: And bunds: Stocks were walloped: Stocks should have done well.
That’ll decide it in the end. From The Hill: A strong majority of Americans believe the U.S. should take steps to correct its trade deficit with China, but a majority disapprove of President Trump’s proposed tariffs and there are fears that a trade war could damage the economy. According to the latest Harvard CAPS/Harris Poll, 71 percent
From Goldman: We estimate that nonfarm payrolls increased 200k in March, 15k above consensus. While we believe elevated snowfall will cause job growth to decelerate from the +276k average pace in the prior two months, labor market fundamentals remain solid and appear to have improved further. …we estimate the unemployment rate fell to 4.0% in March.
DXY was firm last night: AUD ripped: Gold fell: Oil rose: Base metals broke: Big miners too: EM stocks were off their worst: Junk too: Treasuries were dumped: Bunds bought: And recovered strongly from an early sell down: Last night did not start well as China listed its new trade war riposte, via the FT:
DXY rebounded last night: The Australian dollar was hammered against everything: Gold slumped: Oil too: Base metals were mixed: Big miners hit: EM stocks too: Junk eased: The Treasury curve was hammered: Bunds were bought: And stocks gave up a lot of yesterday’s gains: The WSJ has some nice perspective: …some investors are putting trade-war
The titans are out and they do not like what they see. First up, Ray Dalio: Politics is playing a bigger role in influencing the markets than is typical, and I (and others) am still trying to figure out where Donald Trump is taking us, especially as it regards trade and other wars. Besides prompting
DXY was pounded lower last night: AUD lifted but is at 2015 lows against EUR: It was mixed versus EMs: Gold firmed: Oil fell: Base metals were mixed: Big miners too: EM stocks took off: Junk rebounded: Treasuries were sold: Bunds too: US stocks roared off support. The EUR squashed European shares: The FT has
DXY was soft Friday night: AUD fell against everything: Gold was strong: Oil too: Base metals were hit: Big miners are toast: EM stocks sold: Worse, junk broke: Treasuries were bid: Bunds too: And stocks were flogged again: The problem is not as specific as trade wars, though that is a part of it. It is that
The Dastayari Afifar goes global, via Campus Reform: Several Republican lawmakers are backing a new bill that would further tighten the screws on Chinese “Confucius Institutes” in U.S. colleges and universities. The bill, S.2583, was introduced by Republican Senators Marco Rubio and Tom Cotton, and is intended to amend two laws in order to make it
By Leith van Onselen JP Morgan’s Joseph Lupton forecasts that the US economy will expand by 1.25% over the next two years thanks to President Donald Trump’s company tax cut package, but that the tax cuts could potentially lead to 1970s-style stagflation, noting that fiscal conditions in the US at present are similar to those
By Leith van Onselen CNBC has published an interesting report on the large number of Californians that are leaving the state due to crippling housing costs: Californians may still love the beautiful weather and beaches, but more and more they are fed up with the high housing costs and taxes and deciding to flee to
DXY was smacked last last night: And the Aussie flew: Gold roared back: Oil went vertical: Base metals firmed: Big miners too: EM stocks lifted: Junk too: Treasuries were bought at the short end: Bunds were stable: And stocks eased back: The Fed hiked: Information received since the Federal Open Market Committee met in January
Via WaPo: President Trump is preparing to impose a package of $60 billion in annual tariffs against China, following through on a long-time threat that he says will punish China for intellectual property infringement and create more American jobs. The tariff package, which Trump plans to unveil by Friday, was confirmed by four senior administration
Via the WSJ: President Donald Trump has offered Lawrence Kudlow the job as director of the National Economic Council and he accepted, making the economic commentator one of the president’s top economic advisers, Mr. Kudlow said in an interview. We’ve all watched Kudlow for years on CNBC spout his supply-side Reaganomics drivel. Calculated Risk records
DXY was stable Friday night: AUD ran wild as iron ore crashed. Go figure: Gold was stable: Oil took off as the US rig count eased slightly: Base metals rebounded: Big miners did too, weakly: EM stocks flew: Junk firmed: Treasuries were sold a little: Bunds too: Stocks went completely nuts: And here’s why. US
Via Calculated Risk: On Friday at 8:30 AM ET, the BLS will release the employment report for February. The consensus, according to Bloomberg, is for an increase of 205,000 non-farm payroll jobs in February (with a range of estimates between 152,000 to 230,000), and for the unemployment rate to decline to 4.0%. The BLS reported 200,000
DXY was up a little last night: AUD fell against DMs: But rose against EMs: Gold was hit: Oil fell: Dirt fell: Miners fell: EM stocks fell: Junk fell: Treasuries were stable: And bunds: Stocks gained a little: Stocks were helped by possible exceptions in Trump tariff war. Meanwhile, the US boom is warming up
As Cohn goes so Navarro rises, via Bloomberg: The Trump administration is considering clamping down on Chinese investments in the U.S. and imposing tariffs on a broad range of its imports to punish Beijing for its alleged theft of intellectual property, according to people familiar with the matter. The U.S. Trade Representative’s office last year
Via CNBC: DXY and S&P futures not happy:
Via the FT: US companies are on track this year to return a record $1tn to shareholders, as Donald Trump’s tax cuts prompt boards to boost buybacks and dividends at a faster rate than their capital expenditure, research and development budgets or wage bills. Goldman Sachs estimated in February that buybacks would jump by 23 per
