Economy

$20 Billion Jump In Margin Debt In February March 30, 2015

Posted by Knowledge Leaders Team in Economy

NYSE margin debt increased by $20 billion in February. The one-month change is the largest change in 8 months. Margin debt is at the second highest level of all time and it currently stands just $787 million below the all-time high set in February 2014.

Assets At US Fed Are (Finally) Declining March 23, 2015

Posted by Knowledge Leaders Team in Economy

Throughout QE3, one of our favorite charts to look at was the three-month change in total fed assets. You could overlay this series with bonds or stocks or other economic indicators and find some interesting relationship.

From 5-Years To 30-Years, TIPS Implied Inflation Expectations Are Under 2% March 23, 2015

Posted by Knowledge Leaders Team in Economy

Inflation is falling and so are inflation expectations. We and the majority of the rest of the financial community have been highlighting this for most of 2015.

The Other “Most Crowded” Trade is (Still) to Short Long-term Treasury Bonds March 19, 2015

Posted by Knowledge Leaders Team in Economy

In a nutshell, we are absolutely amazed at the amount of pain endured by speculators who are short long-term treasury bonds.

Why Not Just Buy The US 5-Year Treasury? March 19, 2015

Posted by Knowledge Leaders Team in Economy

The collapse in yields around the developed world is startling. For fun, we wanted to see how many 5-year or longer dated government bonds are currently yielding less than the US 5-year on-the-run treasury bond (which is down 23 bps YTD itself).

SKEW Has Moderated Somewhat, But Remains Elevated March 19, 2015

Posted by Knowledge Leaders Team in Economy

While the CBOE SKEW Index has fallen back somewhat from highs last fall (see our comment here), it remains quite elevated– both relative to history and on an absolute basis. Indeed, the further the index rises above 100, the higher the probability of ’outlier returns’. For a full description of the indicator’s profile, see here.

PPI and Trade Prices Weakest Ever In An Expansionary Period March 13, 2015

Posted by Knowledge Leaders Team in Economy

With the release of (the plunging) producer price index today, we thought we would take a look at some of our latest PPI and trade price charts (i.e. February data point) that have been released in the last two days.

The Market Is Pricing In Two Rate Hikes In 2015 (And Four In 2016) March 11, 2015

Posted by Knowledge Leaders Team in Economy

According to Fed Fund futures, the market currently expects about 2 rate hikes by December 2015 (assuming the Fed raises rates by 25 basis points each time). Fed Funds futures is pricing the Fed Funds Rate at 54 basis points by December 2015.

The Strong USD Is Negatively Impacting US Trade March 06, 2015

Posted by Knowledge Leaders Team in Economy

Exports have been a solid contributor to US GDP growth for the last few years, while consumption and residential investment have been more restrained. Recently, with consumption firming and likely to improve further from the tail-wind of lower oil prices, and exports faltering, it appears the drivers of the US economy are trading places.

USD and Purchasing Power Parity March 06, 2015

Posted by Knowledge Leaders Team in Economy

We mentioned yesterday that the US dollar is again breaking out and that tends to be negative for most stocks around the world. Today, we thought we would continue to look at US dollar strength. The nominal trade-weighted dollar index by major currencies is again very close to breaking out to 11+ year highs.

On the Long Bond and Why the Widow Maker is Alive and Well February 27, 2015

Posted by Knowledge Leaders Team in Economy

Perhaps one of the most important questions investors need to answer today is whether we’ve seen the low in the long bonds yields or whether the trend lower is firmly intact.

US CPI Makes The Rare Plunge Into Negative Territory February 26, 2015

Posted by Knowledge Leaders Team in Economy

While we recognize that the negative year-over-year change in the US CPI may soon reverse given gas prices have risen by nearly 30 cents, we wanted to highlight how rare a negative year-over-year print is in the US.

The Pop In US Mortgage Apps Was Fun While It Lasted February 25, 2015

Posted by Knowledge Leaders Team in Economy

After starting the year off with a bang (thanks to refinancing activity), US mortgage applications are tumbling back towards the depressed 2014 levels. Mortgage apps fell for the third straight week even as the purchase index rose for the first time in seven weeks.

Spread Between US and German 10-Years Bonds At Widest Level Since 1989 February 20, 2015

Posted by Knowledge Leaders Team in Economy

On Tuesday, the spread between the US 10-year bond and the German 10-year bond reach 180 basis points (currently at 176 basis points). This was the widest spread since May 11, 1989.

Top Line Growth is Becoming More Bifurcated Across Economic Sectors February 20, 2015

Posted by Knowledge Leaders Team in Economy

The growth leaders and laggards are becoming more apparent by the day – or at least analysts think so. In the below charts we show the median and average top line expected next twelve months growth estimates for certain economic sectors.

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