December 13, 2018
Gimme some truth. That is what John Lennon craved back in 1971. In 2018, it seems that investors and traders crave the same thing:
I’m sick and tired of hearing things
From uptight, short-sighted,narrow-minded hypocrits
All I want is the truth, just Give me some truth
I’ve had enough of reading things
By neurotic, psychotic, pig-headed politicians
No short-haired, yellow-bellied, son of tricky dicky
Is going to mother hubbard soft soap me
With a pocketful of hope
Money for dope, money for rope
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Tags: Brexit, British pound, ECB, Euro, Mario Draghi, SNB, Swiss Franc, Thomas Jordan
Posted in Currency, ECB, SNB, UK | 8 Comments »
December 10, 2018
On December 6, I had the pleasure of talking with Anthony Crudele at Futures Radio. Anthony and I covered Russia, yield curves, gold/currencies and the Chinese tariff situation. Enjoy the discussion, be it on the tread mill, stationary bike or sipping your favorite libation. My favorite drink is now Wild Irish Rose sent to me by the great trader and humorist P. Lynch. And please, keep the comments coming as powerful questions lead to quality discourse and potential profitable trades.
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Tags: Brexit, British pound, Footsie, S&P 500
Posted in UK | 6 Comments »
December 9, 2018
Germany chose a new CDU party leader to replace Angela Merkel. Membership chose Merkel’s hand-picked choice Annegret Kramp-Karrenbauer, also known as AKK. This is a very poor choice as it reflects a continuation of the status quo at a time that the traditional German ruling parties are struggling to maintain voter support. These are turbulent times for Germany, Europe and the world and Chancellor Merkel has proven to be too staid to deal with a world threatened by a populist upheaval.
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Tags: AfD, AKK, Angela Merkel, Bunds, CDU, ECB, EU
Posted in Europe, Germany | 7 Comments »
December 9, 2018
In what appeared to be a “soft” unemployment report, the equity markets discarded the traditional Goldilocks response to weaker data and spent the entire session in sell mode. That sent the S&Ps to a 4.5% LOSS for the week. The BULLS are in trouble for the market rejected what was regarded as POSITIVE news and continued the 11-week long correction. The G-20, “dovish” FED and softer data were cast aside as new negative stories, like the arrest of a significant Chinese business leader and the Mueller investigation closing in on the president. OPEC’s agreed cut in oil production sent crude oil prices moderately higher on Friday, which would have given a boost to the S&Ps as energy stocks would have been bid in past occasions.
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Tags: Canadian Dollar, Canadian nonfarm payrolls, Gold, Peter Navarro, Robert Lighthizer, S&P 500, tariffs, tax cuts, trade, U.S. Dollar, U.S. nonfarm payrolls, yield curves
Posted in Canada, Currency, Gold, United States | 7 Comments »
December 6, 2018
At the end of 2017, my readers may recall that I did an unusual thing. I made a prognostication as where the 10-year yield will end the year. I said the 10-year would end the year at 3.41 percent, to which a friend offered up a bottle of Pappy Van Winkle bourbon if the rate reached that level. (The yield was 2.60 percent at the time.) Well, I’m throwing in the towel as it looks like 3.26 percent looks to be the top for the year. I guess I will have to enjoy a lesser-quality libation.
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Tags: 10-year yield, average hourly earnings, Bank of Canada, Canada unemployment report, China, oil, Opec, U.S. unemployment report, U.S. yield curves, Yuan
Posted in BOC, Canada, Oil, United States | 5 Comments »
December 4, 2018
I’ve been thinking about the Churchill quote referring to Russia. Rather than referencing Russia my thoughts turn to the flattening yield curves that began on Monday. As commodity, global equities markets, the Chinese yuan and the precious metals all staged strong rallies, the long-end of the yield curve also rallied, especially the 10-YEAR. As a result, the 2/10 curve flattened to a 10-year low of 15 basis points. On Tuesday, the curves flattened even more as the 2/10 closed at 10.7 basis points. As Vizzini from the Princess Bride would say, “INCONCEIVABLE!” To support the rally in the long-end of the curve there was a retracement of the recent rally in global equity markets (the NIKKEI, DAX and S&Ps were all down substantially). This suggests that the positive news from the G-20 meeting has now been cast asunder because investors are struggling to comprehend what actually took place in Buenos Aires between the U.S. and Chinese delegations.
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Tags: 10-year, DAX, ECB, Europe, G-20, metals, Nikkei, oil, Robert Lighthizer, SPS, trade, yield curves
Posted in Debt Market, Equity, United States | 18 Comments »
November 29, 2018
The Twitterverse is atwitter with news bits about the coming meeting this Friday and Saturday. There are rumors that Putin and Trump were going to meet but now the get-together is off. The once-scorned Peter Navarro is to be at the Xi/Trump summit after all. An Argentinian Judge has suggested that Saudi Crown Prince MBS may be arrested for the killing of Jamal Khashoggi. There will be no agreement on free trade in the G-20 communique, especially as Trump has renewed threats against German auto firms with a 25 percent tariff on its exports to the United States. When Donald Trump comes to town it truly portends a three-ring circus.
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Tags: Angela Merkel, China, crude oil, Europe, G-20, Germany, Russia, Saudi Arabia, Xi Jinping
Posted in G-20, Oil | 9 Comments »
November 28, 2018
I know my readers are tired of my typical line of cynicism but it has never been more relevant than this week. On Monday, NASA succeeded in landing a space vehicle on Mars. HOWEVER, the FOMC can’t even define what the NEUTRAL RATE of interest is for the U.S. economy.
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Tags: Fed, financial stability, FOMC, Jerome Powell
Posted in Fed | 10 Comments »
November 25, 2018
Tonight, we at Notes From Underground will clean up some unfinished business. We will discuss a couple of important speeches and articles from the past two weeks.
Then I will answer the questions Mike Temple made on the previous blog post. In responding to some of Mike’s points I come back to the idea of INFRASTRUCTURE, which I addressed in a few other blog posts. The reason I foresee aggressive fiscal stimulus put forth by the G-20 is precisely because of some of the fears that Mike raises about the damage coming to the investment grade corporate bond market while the FED’s shrinks its balance sheet and raise interest rates. It may be having a greater impact than the FOMC wants to acknowledge.
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Tags: Bundesbank, corporate debt, ECB, Fed, FOMC, infrastructure, Jens Weidmann, U.S. Dollar
Posted in Currency, Debt Market, Fed | 14 Comments »
November 20, 2018
It was a pleasure to spend time with Peter Boockvar, David Rosenberg and Richard Bonugli as we prepared a
Thanksgiving feast for the global macro world. We cover many relevant areas and provide measured analysis of important financial concerns. Pour your favorite libation and take a listen as you sift through the cornucopia of ideas and develop possible profitable trades.
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Tags: CME, Goldman Sachs, ICE, natural gas, Podcast, RORO, Virtu Financial
Posted in Commodities, Equity, Gold, natural gas | 10 Comments »
