from the St Louis Fed For families who are struggling financially, there are times when it is better to keep some cash on hand, even if they hold high-interest debt. A recent In the Balance article highlights the importance of emergency savings to the financial stability of struggling households. It was authored by Emily Gallagher, a visiting scholar at the St. Louis Fed’s Center for Household Financial Stability, and Jorge Sabat, a research fellow at the Center for Social Development at Washington University in St. Louis. The Struggle to Make Ends Meet Many families continue to struggle to make ends meet, the authors said, noting a rece...
There is a strong argument to be made that central banks underestimated the efficiency of the transmission channel between accommodative policies and financial markets while simultaneously overestimating the efficiency of the transmission channel between those same financial markets and the real economy. That’s from a piece we did for DealBreaker a couple of months back and the point there is that the policy response to the crisis has effectively served to exacerbate the wealth divide in America. Although this isn’t a perfect way to visualize the excerpted passage above, it does a decent job of getting the point across: Obviously, central...
Investors seeking momentum may have iShares MSCI Indonesia ETF (EIDO – Free Report) on the radar now. The fund recently hit a new 52-week high. Shares of EIDO are up approximately 23.3% from their 52-week low of $22.41/share. But could there be more gains ahead for this ETF? Let’s take a look at the fund and the near-term outlook to get a better idea of where it might be headed. EIDO in Focus EIDO focuses on providing exposure to companies in the Indonesian equity market. The fund has key holdings in the Financials, Consumer Staples and Consumer Discretionary sectors, with a respective allocation of 36.0%, 15.1% and 12.9%. EIDO char...
I’m not going to write anything here about the huge drop in bitcoin over the last few days, so what I am writing cannot be ignored should bitcoin get back up to the 20,000 range. And I’m not going to write about the stupid articles that espouse bitcoin. Though to get a sense of the level of thoughtfulness for the arguments for bitcoin, just to pull one recent one at random, check out this from Forbes. I’m going to point out only one simple but devastating barrier to bitcoin becoming the standard, becoming even a second-tier means of payment: If bitcoin doesn’t find its way back into the shadows of the drug trade and...
Dollar/CAD traded lower as the Canadian dollar enjoyed mostly upbeat figures. Will this continue? There are no Canadian economic releases scheduled for the holiday week, but low liquidity could result in outsized movesHere are the highlights and an updated technical analysis for USD/CAD. Canadian inflation is finally picking up. The rise of headline CPI by 0.3% m/m was accompanied by advanced on almost all the core measures. In addition, retail sales advanced more than expected. This double-feature publication sent USD/CAD lower. GDP disappointed by remaining flat m/m in October, but it did stop the loonie. In the US, the tax bill was signed...
Last week I put the finishing touches on the 2017 End of Year Special Edition of the Weekly Macro Themes report – something which is fast becoming a tradition here! The report brought together the charts that worked (as well as those that didn’t!), some honorable mentions, the ones to watch in 2018, a few fun charts at the end, and of course – the topic of this blog post – my favorite charts of 2017. These are my favorites for a few reasons, they might have been about a critical issue or may have simply been a new way of looking at something. Anyway, I hope you enjoy them, and be sure to check out the report (whi...
‘Twas the morning of Xmas and all through the markets, not a human creature was stirring…but it appears the machines took major advantage of the low liquidity... Around 730amET, it seems the algos went on a deep stop hunt, flash-crashing EURUSD by four big figures, taking out the November 7th low stops – all the way back to the lowest print since mid July. Prices then stabilized after ramping back higher. Additionally, there appears to be some dollar liquidity stress once again – specifically in Japanese markets as the forward discount for USDJPY spiked from around 0.04 yen to around 0.23 yen. As Bloomberg notes, t...
As we are approaching the end of 2017, it’s time to look back at the hot investing areas of 2017. This is especially true as this year has treated the broader market well. The S&P 500 has gained about 19%, the Nasdaq has crossed the 7000 mark and the Dow Jones hit several highs. However, some specific sectors shone even brighter in the galaxy of equities in 2017. Below we highlight those winning ones. Technology The technology sector has been on fire this year thanks to improving economic and industry fundamentals and Trump’s corporate tax reform. The rise of new technology such as cloud computing, big data, and the Internet of Thing...
GBP/CHF The British pound has rallied against the Swiss franc for the last several months, but it looks as if we are running into serious trouble at the 1.35 handle above. It coincides with the 61.8% Fibonacci retracement level of the most recent move lower, but we have now filled a significant gap so I think the next several weeks will be very important to the future direction of this pair. While the GBP/USD pair has been very interesting and at an inflection point, this pair will be the same but on steroids. If we were to break above the 1.35 level on the weekly chart, I think that is a sign that we are going to go much higher, retracing th...
Back in June, when Goldman “accidentally” triggered a mini-tech rout with a note that would ultimately end up being their most read piece of research released in 2017, most investors couldn’t seem to get past the title: That right there is the market equivalent of heresy. FANG can’t be mispriced. After all, no price is too high to pay for a slice of the future. “Just buy the damn robots” at any price. Josh Brown said so. But if you did manage to get past the inflammatory title (which, by the way, wasn’t actually inflammatory because there’s never a “bad” time to ask if you might be paying too much for something), what ...