Back in the good ole' days of mid-January, asset allocators could look to long-duration US government bonds as a refuge for stormy weather. Those days are no longer. In recent weeks investors have panic bought into this supposed safety asset to a degree never before...
Widespread underperformance of Dow Jones Industrial Average stocks is a significant negative indicator for US stocks in our view. In this special report, we present charts of the 30 Dow stocks relative to long-duration US treasury bonds and gold for the last five years. Spoiler:...
Today’s US economic data releases have sent growth expectations plunging for fourth quarter GDP. First, retail sales ex-autos and gasoline rose only .1% in October, well below the .3% expectation. Second, industrial production fell twice as much as expected in October, dropping -.8% compared to...
How in the heck can the 30 year Treasury bond yield be trading at just 1.97%, an all-time low, when just 10 months ago it was up at 3.46% and "breaking out" to the upside? We were supposed to have a bond-pocalypse, after all, with...
Today's news of 10% tariffs on a the remaining $300bn of imports from China took markets by storm with US stocks moving from a 1% gain to almost a 1% loss on the day. Meanwhile, gold closed at a 6-year high of $1445. But the...
On Tuesday of this week we wrote about the four possible scenarios the Fed could adopt in their Wednesday policy decision. In order of most hawkish to most dovish, those scenarios were: Fed does not cut rates and signals that a rate cut may be...
Yesterday we wrote about three macro factors that will act to restrain economic growth through the rest of 2019 and into 2020. Those risks are the baked-in fiscal tightening, the lagged effects of monetary policy tightening, and growth retarding trade policy. Together, they could restrain...
We are quite sure many of our readers are eager to turn the calendar and be done with 2018's turbulent and unforgiving markets. After all, US stocks have gyrated wildly for the entire year, foreign stocks have gotten absolutely no love, and traditional diversifiers like...
On this quarter's conference call, Steve and Bryce dissected US Treasury bonds, discussing the message of the rates market and how this is directing asset allocation. The following slide deck covers their discussion of the following: The bond market has enjoyed a 10-year tailwind from...
Is last week's 18 basis point selloff in 10 year government bonds the start of a bond bear market or a market adjusting to the realities of the time, albeit in a somewhat disorderly way? The answer to this question has obvious implications for not...
We are living through a period of extremely crowded trades at the moment, as Jeff Gundlach notably quipped several days ago. The risk in crowded trades is of course that what would otherwise be relatively minor risk reversals can cause massive covering of positions resulting in...
Recently, fears of a slowdown in global growth brought on by a trade war have led to turbulence in cyclical assets. The US Dollar has risen while commodities and emerging markets have struggled. The Chinese Yuan has depreciated significantly, recalling fears of the 2014-2016 industrial...
Oil prices have pushed through resistance and are breaking out while the US dollar has pushed through support and is breaking down. All of the major industrial commodity prices are moving in lock step, while the global economy appears to be accelerating led by the...
