Bank of New York

"A Barrage Of Fed Speakers": The Key Events In The Coming Very Busy Week

As markets continue to digest the implications of the US election outcome, there is a host of data and Central Bank communication adding to the running narrative with Fed speakers appearing on every single day of the week. In addition to barrage of daily Fed speakers, including Chair Yellen, we get US inflation data, retail sales, housing data, empire manufacturing, industrial production and the Philly Fed.

Global Stocks, US Futures Modestly Higher As Debate Digested, Draghi Eyed

Global stocks were modestly higher, before the European Central Bank gives its policy update, while investors weigh mixed earnings results. Asian stocks rise, U.S. equity-index futures are little changed.  The euro touched its weakest level since July and stocks in the region fell after their first back-to-back gains in two weeks.

Key Events In The Coming Week

The key economic releases this week include industrial production on Monday, CPI on Tuesday, and housing starts on Wednesday. There are several scheduled speeches from Fed officials this week. The Beige Book for the November FOMC period will be released on Wednesday.

Brace Yourself For The Quadrillion-Dollar Reckoning

"...debt is simply everywhere, at least to the extent we can see and measure it. Corporate and sovereign debt, of both the developed world and emerging market varieties, are at record levels. China’s debts certainly add to that record but who really knows to what extent? It’s the ultimate black box of leverage on Planet Earth... You cannot NOT worry about the Fed in this world...The simple truth is ending reinvestment would bring the bond market to its knees.

"Investment Returns Will Be Very Low Going Forward" Ray Dalio Says Gold Could Prove Preferable

With bond-stock correlations reaching record highs (and broad risk parity fund performance deteriorating rapidly), Ray Dalio’s $150 billion Bridgewater Associates managed modest gains across its main strategies last month - even as macro funds have suffered amid policy and political uncertainty. However, the manager of the world's largest hedge fund warns “Investment returns will be very low going forward,” in his latest investor remarks, suggesting that betting on gold could prove preferable.

Key Events In The Coming Week

In the US focus will be on the market's reaction to the second presidential debate, FOMC Minutes but also retail sales, import and producer prices and Michigan sentiment. We also hear from various Fed speakers throughout the week, and Chair Yellen gives a keynote speech on Friday.

What Bridgewater's Ray Dalio Told The New York Fed

  • this isn’t a normal business cycle and we are likely in an environment of abnormally slow growth
  • the current tools of monetary policy will be a lot less effective going forward
  • the risks are asymmetric to the downside
  • the impatience with economic stagnation, especially among middle and lower income earners, is leading to dangerous populism and nationalism.