Over 40% of FDIC deposits in the U.S. are uninsured.... Read More
Selected charts and excerpts from some of our research over the past week.... Read More
Deflationary fears are dangerously close to reviving on the heels of slowing global growth and tumbling commodity prices.... Read More
Economists' forecasts are not following decelerating economic data. They remain near peak optimism. Are they paying attention?... Read More
This week's economic data releases have the potential to make or break the Fed's hopes to hike in 2019. U.S. economic data changes are beginning to fall below one-year average growth rates, fulfilling dramatically rising concerns over the path of the U.S. economy.... Read More
Inflation expectations and Fed policy seem to move in lockstep with energy prices. The fall in crude has dampened inflation expectations, prompting the Fed to take a "wait-and-see" approach to hikes in 2019. Does all of this reverse if crude oil prices rebound? Is crude oil running Fed policy?... Read More
Rising volatility is sending investors out of leveraged loan ETFs. The pace of tightening in financial conditions remains a threat for both leveraged loans and high yield. ... Read More
The handout, audio replay, webinar replay and summary of our December 6, 2018 conference call.... Read More
Falling rate hike timing can be attributed to equal contributions by slowing global economic growth and inflation expectations. Heavy steepening positioning across the U.S. Treasury curve will be put to the test heading into year-end.... Read More
The financial sector is in investors' crosshairs as a rotation out of cyclical sectors continues. Asset managers and insurers have underperformed so far, but banks and diversified financials are more exposed to contracting leverage. ... Read More
The U.S. credit markets have seen some relief over the past two days, even as equity market performance soured. We see stronger signs of lasting relief for investment grade, lingering reasons for concern on high yield. ... Read More
The highly idiosyncratic high yield bond market has been consumed by index trading. This represents a risk as the bonds that make up these indices are too different to assume they can trade as one. When stresses rise enough, these bonds could go their separate ways, making index level strategies ineffective.... Read More
The U.S. Treasury yield curve inversion has begun to flash warning lights about a slowdown in U.S. economic growth. But, a recession is still better timed by realized economic data.... Read More
We continue to believe the effects of trade and tariffs on the markets are overstated. Markets are reacting to inverted yield curves, monetary policy, and slowing global growth more so than tweets from "tariff man."... Read More
Amazon's latest move to control more of its distribution strikes the shipping industry at an awkward time. Concerns over the rising competition will compound worries about slowing growth and margins. ... Read More
Typically a flattening yield curve is a market signal that the Fed has misread inflation and is tightening too much. While the the 3-month/10yr curve is the measure most economists prefer to watch, the 2yr/5yr and 3yr/5yr curves are now inverted. Historically, every time the 2yr/5yr curve has inverted, the entire curve has inverted before the cycle was over.... Read More
U.S. inflation has lost momentum on the heels of slowing global growth, dampening the Fed's hawkish bias. Bond investors refuse to become concerned a rash of inflation or tightening can occur as evidenced by low U.S. Treasury volatility.... Read More
A sharp two-day rally in the Chinese yuan has risk markets captivated, but the Chinese industrial economy is the real question. With correlations between industrial metals and risk markets still at multi-year highs, search trends in Australia paint a bullish picture. ... Read More
Scott Galloway recently offered his thoughts that China's core competency may be at risk due to the trade war.... Read More
The government of Alberta blinked as the collapse in oil prices continued to weigh on the local economy. Measures to cut production and boost takeaway capacity in the region took prices off their lows. The Bank of Canada will be pressed to maintain its hawkish stance.... Read More