News Sentiment and Bonds
Academic literature has documented a news sentiment effect on equities.
Should Markets Heed Recession Warnings?
Amid a renewed US-China trade spat and additional tariff tensions between the United States and Mexico, investor concerns about a possible recession have heightened, according to Ed Perks, executive vice president and chief investment officer, Franklin Templeton Multi-Asset Solutions.
What a U.S. Rate Cut Could Mean for Gold Prices
Market Rangebound; Upgrading Services
A Global Economy Far From “Normal”
Election fever hit India and Australia in May. The former, the largest democratic election in the world, resulted in a comfortable win for the incumbent – Narendra Modi and his Hindu Nationalist Party (Bharatiya Janata Party). Mr. Modi comes from a humble background and this appears to have resonated with millions of voters aspiring to a similar uplift in fortunes.
One Plus One Equals Three
To watch the money and bond markets of late, there is one development that stands out quite clearly: the Federal Reserve (Fed) has to cut interest rates. In fact, from the markets’ perspective, trade uncertainty plus economic weakness equals three rate cuts. Or quite simply: 1+1=3.
Oil Rebounds, Futures Tick Higher
The S&P 500 futures trade 11 points, or 0.4%, above fair value, supported by a bounce in oil and by lingering optimism for the Fed’s policy decision next week. Many of the energy stocks are up in pre-market action following the sharp increase in the price of oil ($53.04/bbl, +$1.90, +3.7%), which fell over 4% yesterday.
Word is Bond (w/ AK)
Trading (Not Trade) Momentum Boosting The Market
The futures market is showing nice gains this morning for the major indices, which is setting up the cash market for a positive start. The S&P 500 futures are up 17 points and are trading 0.7% above fair value.
June 2019 Fixed Income Market Update
The market sentiment decline in May was largely driven by the ongoing trade dispute between the U.S. and China. After expectations of a near term resolution had buoyed markets in April, these hopes faded in May.
Is The Bond Market Flashing Recession?
June 4, 2019
Technical Analysis (Gold, Dollar, Oil and more) Heading into Tuesday’s Open
Bonds Take A Turn
The gap between what long- and short-term government bonds pay investors has inverted more widely, potentially portending impending recession.Yields on long-term government bonds around the world are at their lowest levels in years.
Preaching Patience with Risk Assets
Markets just got a wake-up call on trade that interrupted their pleasant dreams of recovery from late last year. Aggressive U.S.-China negotiations have now escalated to an outright trade war, with significant tariff levies on both sides, and more threatened. Reports of Chinese flexibility on technology transfer and intellectual property violations have given way to accusations of U.S. “blackmail,” vows to never give ground on China’s “core interests,” and greater importance placed on bilateral deals with Europe.
Caution Warranted; Downgrading Materials
Why Under-Owned Europe May be Worth a Look
Early Look – 5-23-19
U.S. futures are sharply lower, with global markets feeling pain overnight as the war of words between China and the U.S. intensifies. Overnight a top Chinese government researcher said that a trade war may last until 2035, predicting a cycle of “fighting and talking.” Bloomberg also noted that Goldman Sachs Group Inc., Nomura Holdings Inc. and JPMorgan Chase and Co. are among those pricing-in a greater chance of a protracted trade war. Meanwhile, the South China Morning Post reported that tensions are forcing China to rethink its entire economic relationship with the U.S. Lots of negativity weighing on stock market sentiment, as global markets are lower.
Performance Highlights of Fixed Income ETFs
Money Markets: Spreads Move to Extremes
How Is The Fed Changing Its Approach To Inflation?
May 2019 Fixed Income Market Update
The International Monetary Fund (IMF) lowered its global growth outlook for 2019 to 3.3% from 3.5%, while noting it believed “the balance of risks remains skewed to the downside.” For 2020 though, the IMF expects an improvement of growth to 3.6%. Euro-area GDP grew more than expected in the first quarter at 0.4% and 1.2% for the trailing year. Unemployment in the Eurozone declined 0.1% to 7.7% in February. However, other data such as manufacturing PMI declined to 51.3 in April from 51.6 in March.