zaterdag 10 juni 2017

Weekend Reading: The Everything Bump

I received an email this morning that is symptomatic of the current psychology prevailing in the market currently: “It seems to me like much of the market movement these days due by the huge increase in algo-driven trading and also by direct or indirect CB intervention. Every time you see the market dip, even just a little, you get what seemingly used to be a rare, V-shape rally. It’s like a shot of liquidity hits the market at just the right time or right technical level, the algos hit it, and the market just shoots higher. We don’t even get a 5% drop anymore.” It certainly does seem that way. As I posted just last week, the reinvestment of the Fed’s balance sheet has certainly been very well timed. Each time the market has stumbled, the Fed has been there to provide the “safety net”...

But it hasn’t been just stocks “on a run” as of late, but bonds as well. Interestingly, despite the current exuberance of earnings growth, expectations of “Trumponomics,” and a “hawkish” Fed hiking rates, the bond market continues to reflect weak economics, sliding inflation and concern about legislative progress...

Economic data is not buying it either. Headline after headline, as of late, has continued to disappoint from new and existing home sales, to autos, to inventories and now employment. This also put the Fed at risk of further rate hikes this year as noted on Thursday: “It appears traders are losing faith in the rest of the year as the odds of a hike occuring in December is now above that of September (as both drop to around 25%). As economic data has crashed since The Fed hiked rates in March, so the markets expectations has dropped to just 1.44 rate-hikes this year (one in June guaranteed), well below The Fed’s guidance of 2 more rate-hikes minimum”...

Of course, while the mainstream media continues to espouse the “just buy everything” mantra, it certainly seems that CEO’s are paying more attention to the collapse in the economic data...

Just something to think about because “the everything bump” typically doesn’t last long.
# Politics/Fed/Economy;
- U.K. Election, Outsider Looking In by Danielle Dimartino-Booth via MoneyStrong
- In Washington, Glass-Steagall Is “Half Full” by Nomi Prins via The Daily Reckoning
- What You Should Know About QT by Craig Wilson via Daily Reckoning
- No Workers, No Growth by Scott Sumner via The Money Illusion
- Confirmation Bias Gives Fed Answer It Wants by Caroline Baum via MarketWatch
- Is The Unemployment Rate Real by Derek Thompson via The Atlantic
- 93% Of Employment Gains Are “B.S.” by Morninghill Capital via RIA
- Why Aren’t Teenagers Working Anymore? by Ben Steverman via Bloomberg
- If Jobless Rate So Low, Why Do Americans Feel Bad by Alia Dastagir via USA Today
- Global Recovery’s Downside Risk by Nouriel Roubini via Project Syndicate
- Signs Of Something, Just Not Wages by Jeffrey Snider via Alhambra Partners
- Economic Forecasting Very Much Broken by Narayana Kocherlakota via Bloomberg View
- Indestructible Notion Of Basic Income by Jesse Walker via Reason
- Economic Policies That Lead To Dispirited Class by Jeff Harding via An Independent Mind
# Markets;
- The Greatest Bubble Ever by Akin Oyedele via BI
- The S&P Has Only Done This 8-Times by The Heisenberg via Talk Markets
- The Bubble That Could Break The World by James Rickards via Daily Reckoning
- Bull Market Will Top Out In 2018 by Michael Sincere via MarketWatch
- Massive Oil Price Problem In Middle East by Ishac Diwan via Project Syndicate
- There’s Danger At Door When Markets Lose Focus by Tad Rivelle via TCW
- Small Caps Have Key To Market by Michael Kahn via Barron’s
- The $100 Trillion Question by Enda Curran via Bloomberg
- What NOT To Buy In Today’s Market by Vitaliy Katsenelson via Contrarian Edge
- Bulls Tightening Grip On Market by Avi Gilburt via MarketWatch
- How Companies Fib About Earnings by John Crudele via NY Post
# Research / Interesting Reads;
- Draghi Won’t Stop Until 2% by Peter Boockvar via The Boock Report
- The Economy Looks Grim by Ray Dalio via Savvy Investor
- Public Policy, Profits, & Populism by Chris Brightman via Research Affiliates
- “Medicare For All?” by Megan McArdle via Bloomberg
- Understanding Today’s Secular Stagnation by Robert Shiller via Project Syndicate
- This Is How Many Jobs Will Be Lost To Robots by Sue Chang via MarketWatch
- 68% Of Young Expect Inheritance by Ester Bloom via CNBC
- Debt Limit Nightmares Coming True? by Brian Beutler via The New Republic
- American’s Face $13 Trillion Debt Hangover by Matt Scully via Bloomberg
- Unhealthy Habits Could Destroy Your Retirement by Kelli Grant via CNBC
- Facebook Is Broken by Jon Evans via Tech Crunch
- Three Factors About The Market by John Hussman via Hussman Funds
- Should You “Bank” On This Divergence? by Dana Lyons via Tumblr
- Learn How To Avoid Annihilation by Jesse Felder via The Felder Report