5-Year Treasury Yield Tumbles Below 2.00% As Short-Squeeze Picks Up

Five-year Treasury yields have tumbled back below 2.00% to the lowest levels in almost three-weeks, extending the drop amid the weakest economic growth period for a rate-hike since 1980. With net positioning near record high shorts, and everyone and their pet rabbit sure that a breakout above 2.15% was 'inevitable', we wonder what happens next.

CEO Pay Soars In 2016 As Employee Wages Continue To Stagnate

CEO pay increases took a brief pause in 2015 dropping to a paltry median of just $10.8 million.  But, the CEO's of America can once again rest assured that their families will not starve to death as 2016 pay soared nearly 7%, setting a post-recession record.

El-Erian Warns Of America's CONfidence Economy

Financial markets seem convinced that the recent surge in business and consumer confidence in the US economy will soon be reflected in “hard” data, such as GDP growth, business investment, consumption, and wages. But economists and policymakers are not so sure. (To some outside the US, it is an assumption that sometimes looks a lot like blind faith.)

Credit Suisse "Climbs The Wall Of Worry", Raises S&P Target To 2,500 From 2,350

"Following the reaching of our mid-year S&P 500 target, we raise both our mid-year and year-end S&P targets to 2,400 and 2,500, respectively (from 2,350 and 2,300). We continue to see a clear-cut risk that we get an overshoot to the upside in equities that then reverses later on; more realistically, this reversal is likely to be a very late-2017 or 2018 event." - Credit Suisse

Key Events In The Coming Week

The key economic releases this week are the new home sales report on Thursday and the durable goods report on Friday. In addition, there are several scheduled speaking engagements by Fed officials this week, including a speech by Chair Yellen on Thursday.

JPM: "Market Patience Could Quickly Run Out If Obamacare Repeal Stays Deadlocked Into April"

"Investors are staying calm but patience could quickly run thin if repeal/replace stays deadlocked into Apr. The Bottom Line for US stocks remains the same: ~$133-135 is still being penciled in for Washington-neutral SPX 2018 EPS and on that number the PE at ~2400 (~18x) is rich but not ridiculous (although to sustain prices north of 2400 Washington will have to add at least a few dollars to the $133-135 range which is why tax reform confidence is so key to justify further gains)."

Frontrunning: March 20

  • Stock futures lower after G20 drops free-trade pledge (Reuters)
  • U.K. to Trigger Brexit on March 29, May’s Spokesman Says (BBG)
  • Comey to Testify on Hill About Russia, Wiretap Allegation (WSJ)
  • Germany, Japan Push Trade Deal as Merkel Seeks Anti-Trump Allies (BBG)
  • North Korea engine test may be prelude to partial ICBM flight (Reuters)
  • Regulators Said to Weigh Appraisal Change That May Spur Lending (BBG)