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Category: Fed

We’re closing out the first quarter and Emerging Markets are leading equities higher, with the MSCI Emerging Markets ETF (EEM) up 13.40% versus 4.95% for U.S. large caps (SPY) and 0.18% for U.S. small caps (IWM). After many years of lagging returns in Emerging Markets, this is a notable gap. The possible explanation? I wrote […]

  • Posted in Equities, Fed, Markets
  • Comments Off on An Emerging Divergence in Central Bank Policy

The most interesting thing in markets today is the growing divergence in short-term interest rates between the U.S. and the rest of the developed world. While Japan and most of Europe have negative 2-year yields, the U.S. 2-year Treasury yield has moved all the way up to 1.38%, its highest level since 2009. At 0.71%, […]

  • Posted in Bonds, Fed, Markets
  • Comments Off on Is the Great Divergence in Central Bank Policy Sustainable?

Fed Hikes and Stock Market Returns

It’s coming. Market participants are expecting the third Fed rate hike since December 2015 at next week’s FOMC meeting. This is a move up in expectations from the start the year when market participants were saying no hike would occur until June. The Fed Funds Effective Rate is now at its highest level since 2008, […]

*Beta Rotation Index, +9.65% Year to Date thru 9/2/2016, remains in offense mode (click here for why this matters) *Pension Partners Tactical Exposure Model +16.48% Year to Date thru 9/2/2016 “If people never did silly things nothing intelligent would ever get done.” – Ludwig Wittgenstein I knew when writing last week’s “Dear Fed, Please STFU” […]

Canceling Signals

“This is a big, big gamble to be manipulating the most important price in free markets, interest rates. These purchases are canceling market signals. The bond market and the stock market have provided wonderful signals for many years as to potential problems. And when you cancel those signals, you could run into a problem. I […]