Bond

The Most Important Market In The World (That You've Never Heard Of)

That so few investors know about this enormous market, its importance, and relevance is frankly pretty shocking. Understanding it goes a long way to understanding why, despite the greatest monetary intervention we’ve ever seen by central banks, we’ve remained in a contractionary environment.

"Meanwhile In Europe..." - The Big Day Arrives

Less than a month after the "shocking" election of Donald Trump as US president, the world prepares for another day of political shockwaves, this time out of Europe, when on Sunday all eyes will be on Italy and, to a slightly lesser extent, Austria.

Did The Market Just Flash A Hindenburg Omen Warning?

Amid the slings and arrows of outrageous fortune in the stock, bond, and commodity markets this week, a few 'rotten' things began to emerge. With major indices diverging notably, new highs and new lows soaring, and breadth deteriorating, analysts noted the re-awakening of The Hindenburg Omen signal...

Goldman's Bear Case In 7 Steps: "We Are In The 98th Percentile Of Historical Valuations"

"S&P 500 valuation is stretched relative to history on nearly every fundamental metric. At the aggregate level, the S&P 500 index trades at the 85th percentile of historical valuation relative to the past 40 years. For portfolio managers, the more important fact is that the median S&P 500 company trades at the 98th percentile of historical valuation."

Trump Vs China: Credit Cycles & Gold

As all experience from the past clearly demonstrates, it is a mistake to believe that the gold price is set solely by dollar interest rates, or its relative strength in other currencies. This being the case, the current weakness of the gold price is simply a reflection of temporary dollar shortages, and nothing more.

Weekend Reading: Trumponomics

“The problem for Trump is that we no longer reside in the 80’s where a large group of ‘baby boomers’ were entering the workforce and driving a massive wave of innovation and productivity changes.  Today, we are on the wrong side of the demographic trends combined with falling productivity and labor force growth.”

Everything You Need To Know About The Italian Referendum (& Should Be Afraid To Ask)

While the post-Trump euphoria in US stocks has been the perfect distraction from the ugly realities elsewhere, this weekend's Italian Referendum could well be the biggest 'revolt' yet, topping Brexit and Trump. Should Italy vote "no", as polls forecast, PM Renzi may quit, leaving the Italian bank recapitalization would then be in jeopardy and, as Bloomberg's Mark Cranfield warns "we could be looking at a Greece-like market reaction on steroids."

"A Watershed Month" - November Sees Greatest "Asset Rotation" Since 2013

The final November fund flow numbers are in, and as BofA's Michael Hartnett puts it, November was a "watershed month" for fund flows with the largest 5-week bond outflows in 3.5 years (Chart 1), largest 3-week precious metals outflows in 3.5 years (Chart 3) and largest 4-week equity inflows in 2 years.

Gross Echoes Gundlach, Says Trump Rally Is Misguided: "Move To Cash"

On the heels of Jeff Gundlach's "there's going to be a buyer's remorse period" warnings yesterday, the other 'bond king' has raised similar fears that the Trump rally is overdone (as are the prospects for growth behind it). Putting aside the book-talking as their bond portfolios suffer, Gross echoes Gundlach's "Trump's not the wizard of oz" comments, noting that the next president faces serious structural headwinds and warns investors "should move to cash," as any fiscal stimulus gains will be temporary at best.

Frontrunning: December 2

  • Futures fall ahead of jobs report (Reuters)
  • Obama to Block Second Chinese Deal on Security Concerns (BBG)
  • Trump Exults in Victory and Mocks Critics at Ohio Rally (BBG)
  • China's Central Bank Is Facing a Major New Headache (BBG)
  • Trump considering Goldman Sachs COO Cohn for energy secretary (Reuters)