All eight indexes on our world watch list have posted gains for 2017 through November 20. The top performer thus far is Hong Kong’s Hang Seng with a gain of 33.0%, followed by India’s BSE SENSEX at 25.43%. In third is Tokyo’s Nikkei with 16.47%. The Last Four Weeks The tables below provide a concise overview of performance comparisons over the last four weeks for these eight major indexes. We’ve also included the average for each week so that we can evaluate the performance of a specific index relative to the overall mean and better understand weekly volatility. The colors for each index name help us visualize the comp...
The UK Chancellor of the Exchequer Hammond is set to deliver his first Autumn budget tomorrow, and it could be his last. The UK government is fragile. Infighting is notorious. It appears the hardline Brexit camp does not trust Hammond. A cabinet reshuffle is widely rumored, and Hammond seems vulnerable. Prime Minister May, who also initially was in the Remain Camp, is said to regard Hammond suspiciously. Hammond is understood to be fiscally conservative, but he is hemmed in by the slowing economy, Brexit uncertainties, and a weak government. His proposal in the spring to have small businesses pay more for National Insurance fell fla...
The economy’s rate of growth surged based on the Chicago Fed National Activity Index (CFNAI) 3 month moving (3MA) average – and economic growth is significantly above the historical trend rate of growth. Analyst Opinion of the CFNAI This Month The single month index which is not used for economic forecasting which unfortunately is what the CFNAI headlines. Economic predictions are based on the 3 month moving average. The single month index historically is very noisy and the 3 month moving average would be the way to view this index in any event. There was significant upward revision to the last 3 months of data. In the table in o...
Forget about big hair, Ray-Bans, and Donkey Kong. Don’t even think about Live-Aid, Thriller, and E.T. Above all else, the 1980s were the gravy days of the money supply aggregates. Beginning in late 1979, the Fed built its policy approach around the aggregates—primarily M1 but occasionally M2, and policymakers also monitored M3 while experimenting with M1B and, later, MZM. But those were just the “official” figures. Economists and pundits debated the Fed’s preferred measures while concocting their own home-brewed variations. Notably, the Fed allowed interest rates to fluctuate as much as necessary to achieve its money growth targets...
What would happen if I recommended a stock that had no profits, was losing billions of dollars a year, and had a net worth of negative $44 trillion? Chances are, you would cancel your subscription to the Mad Hedge Fund Trader, demand a refund, unfriend me on Facebook, and unfollow me on Twitter. What if you did an exercise analyzing the United States of America as a stand-alone corporation? The bottom line: the challenges are so great they would daunt the best turnaround, expert. The good news is that our problems are not hopeless or unsolvable. The US government was a miniscule affair until the Great Depression and WWII, when it exploded ...
Just a short note for today as I am taking a quick vacation for the “Thanksgiving” holiday. As I noted this past weekend: “Thanksgiving week is traditionally an extremely ‘light’ trading period where the ‘inmates are running the asylum.’ With the market more overbought now than at any other period since 2011, a consolidation or further corrective action is entirely possible. While some ‘caution’ is advised, it is NOT advisable to act ’emotionally’ to swings due to the low volume trading that will be occurring. While the market is extremely overbought, the bullish trends remain intact. Furthermore, the last two m...
The US Treasury yield curve collapse continued its unending path to inversion overnight with 2s10s plunging to sub-60bps and 5s30s hits a 65bps handle for the first time since Nov 2007. 2s10s has flattened for 3 days straight, 6 of the last 7 days, and 14 of the last 17 days to a 58bps handle… 5s30s has flattened 3 days straight, 6 of the last 7 days, and 16 of the last 19 days to a 65bps handle… As a reminder, it took The Fed hiking rates to 5.25% in the last cycle before investors finally gave in and financial conditions tightened… for now as financial conditions ease towards record levels, despite a hiking and norm...
Veteran investor and hedge fund mogul George Soros of Soros Fund Management LLC has made some key changes to the fund portfolio as per the latest disclosure with SEC. The Hungarian-born octogenarian has ramped up his $4.2 billion fund’s stake in Comcast Corporation (Nasdaq: CMCSA), TiVo Corporation (Nasdaq: TIVO), and Time Warner Inc. (NYSE: TWX). The legendary hedge fund manager and self-made billionaire launched Soros Fund Management in 1970. He went on to become one of the most successful investors in the history of the United States and famously made an investment profit of U.S. $1 billion during the 1992 Black Wednesday crisis i...
“Index points to a pickup in economic growth in October.” This is the headline for today’s release of the Chicago Fed’s National Activity Index, and here is the opening paragraph from the report: Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) rose to +0.65 in October from +0.36 in September. One of the four broad categories of indicators that make up the index increased from September, but three of the four categories made positive contributions to the index in October. The index’s three-month moving average, CFNAI-MA3, increased to +0.28 in October from +0.01 i...
from Liberty Street Economics — this post authored by David Lucca, Daniel Roberts, and Peter Van Tassel In recent months, some analysts and policymakers have raised concerns about the unusually low level of stock market volatility. For example, in the June Federal Open Market Committee (FOMC) minutes “a few participants expressed concern that subdued market volatility, coupled with a low equity premium, could lead to a buildup of risks to financial stability.” In this post, we review this concern and find the evidence of investor complacency is mixed. On one hand, we present a view suggesting that historical volatility may hav...