The bond rally will continue as long as the Fed remains behind the eight ball in cutting rates and the curve remains inverted. At this point the Fed would need to cut 50 basis points to un-invert the 3m/10y curve.... Read More
Our top posts from the week of August 5, 2019. ... Read More
Plunging rates are creating unusual bond market records.... Read More
How have stock and bond returns compared over various time horizons?... Read More
Our top posts from the week of August 7, 2019.... Read More
We cannot find any economist or Fed official who is predicting five cuts over the next 12 months. The markets see a mistake unfolding and are screaming about it via the inverted curve. The economic and Fed communities continue to forecast a slower path of cuts.... Read More
What gets the Fed to cut 50 bps in September? A 7% to 10% correction gets the conversation going.... Read More
Earnings Update: Q2 2019 at the Halfway Point Now that roughly half of S&P 500 companies have reported, Q2 2019 earnings growth has bounced back to 0.17%. However, Q3 2019 and full-year estimates continue to fall. Who Are the... Read More
A look at total returns through July 2019... Read More
U.S. interest rates, particularly at the short end of the curve, are the highest in the developed world. We believe the markets see the inverted 3m/10y yield curve as a reason for the Fed to cut rates. If the desired outcome is an uninverted curve, the Fed should cut as much as is necessary to bring the short end of the curve markedly lower than the long end.... Read More
A proxy for the future of electronic and algorithmic trading is MarketAxess and Tradeweb. These stocks are booming like no other stocks in the financial sector. Will the entire bond market be reduced to a platform run off a phone app? These companies are trying.... Read More
Bloomberg BusinessWeek screams about low rates on their cover.... Read More
With economic data deteriorating in Europe, rates at both the short end and long end have been falling in the EU.... Read More
The Fed should discuss why U.S. interest rates are the highest in the world and heed the message from the inverted curve. If they take too long to address this issue, they risk creating a recession.... Read More
Our July 18, 2019 internal conference call. ... Read More