Signs of Long Duration Risk Emerging

Markets continue to weaken in key areas. We have been talking for a while about a small group of stocks holding the markets higher. Today we saw a breakdown of these stocks much greater than the overall market. Here's where you need to keep your eyes on in the coming days...

No, The Fed Probably Won’t Hike On Huge Jobs Beat

Coming into NFP Friday, it kind of felt like stocks were going to go up either way. After all, there was virtually no chance of getting a June jobs number as bad as May’s report, a modestly underwhelming print would keep the Fed on hold thereby forestalling the tightening cycle yet again, and in the…

Red Light, Green Light

Earlier this week, we explained how pretty much everything you’re seeing in terms of market swings can be at least partially explained by central bank frontrunning. Stocks up? Investors anticipate the Fed will delay its next hike thanks to the Brexit debacle. Dollar up? Investors know that even if the Fed doesn’t hike, it’s still…

Fed Minutes Reveal Pernicious Policy Paradox; Bond King Says Hang On To Gold

They needed some “additional data.” Data like a vote count from the UK, where the possibility of an imminent black swan landing sealed the deal for no FOMC hike in June. "Members generally agreed that, before assessing whether another step in removing monetary accommodation was warranted, it was prudent to wait for additional data on…

In Dramatic Shift, Fed’s Bullard Says FOMC Should Stop Making Long-Run Projections

This has been the year that markets finally began to question central banks in earnest. It started in January when the Nikkei took a dive and the yen surged following the Bank of Japan’s decision to take rates into negative territory. That was the shot across the bow. By all accounts, the move below zero…

Brexit In The Driver’s Seat For Markets As “Leave” Odds Rise

“In any event, watch the BoJ tonight. USD/JPY sunk to 20-month low at 105.44 before bouncing following the Fed decision. If Japan doesn’t play this exactly right, you could see further yen strength - and we’ve seen what that does to US stocks.” That’s what we said on Thursday afternoon after the Fed struck an…

Gundlach Slams “Zombie Fed,” Says World Is “Losing Control”

Overseas markets got a bit of a breather Wednesday from the safe haven bid as everyone remained stuck in suspended animation ahead of the Fed decision. Come to think of it, that’s ironic because the Fed itself seems to be frozen. We’d be remiss if we didn’t talk about central banks today and tomorrow. As…

Fear Builds Ahead Of Fed, Brexit Vote As German 10-Year Goes Sub-Zero

It’s probably safe to say that there’s now a palpable sense of anxiety hanging over global markets. We previewed the flight to safety here yesterday, noting that Brexit risk was driving investors into supposedly “riskless” assets and haven currencies. Currencies like the yen, which is trying pretty hard to press towards 100, creating a rather…

It May Be Time To Stop Blaming Central Bankers

“My message will be largely favorable, although recent developments have been mixed.” That’s it ladies and gentlemen. We’ve officially reached the nadir of Fed communication. Janet Yellen is now telegraphing what she is about to say in a speech which is itself ostensibly meant to telegraph something else. It’s a kind of bizarre evolution wherein…

"So, Maybe July Then?”: Poor Jobs Report Puts Question Mark Over Fed

Bad news is good news. Or not. The market’s reaction to Friday’s NFP report betrays the extent to which investors and traders no longer have any idea how to read the Federal Reserve. There was a time when negative data was a guaranteed boon for risk. The worse the data, the better for stocks. Why?…

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