High Yield Train Wreck
The first defaults will occur at the lowest end of the problematic market: high yield or “junk” bonds. They will play a role comparable to subprime mortgages in the last crisis. We’ll see mortgage problems as well, but I think overleveraged companies will be the core problem.
Building a Better U.S. Economy
This shouldn’t surprise anyone, but public trust in the federal government is eroding. Sixty years ago, 75 percent of Americans expressed faith in the government to do the right thing “most of the time” or “just about always.” Seventy-five percent! You can’t get 75 percent of people to agree on anything now, as the recent “Laurel or Yanny” video proved.
Beyond the FAANGs: Technology Stocks and Downside Protection
Technology stocks are widely seen as powerful return drivers—with a lot of volatility attached. But surprisingly, shares of many companies that enable the technology revolution can provide solid returns and even downside protection.
The Madness of Crowding Out
Public debt may be growing at the expense of private debt, the Chinese bond market is opening up, and important dates for tariffs are fast approaching.
The Fundamentals of RAE: Seeking Value Beyond Borders
It may be time for U.S. investors to challenge their home-country equity biases.
Existing-Home Sales Slide in April
This morning's release of the April Existing-Home Sales decreased from the previous month to a seasonally adjusted annual rate of 5.46 million units. The Investing.com consensus was for 5.56 million. The latest number represents a 2.5% decrease from the previous month and a 1.4% decrease year-over-year.
FHFA House Price Index: Up 1.7% in Q1
The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for March. U.S. house prices were up 0.1 percent on a seasonally adjusted nominal basis from the previous month. Year-over-year the index is up 6.7% (nonseasonally adjusted). Seasonally adjusted, the index is up 4.73% year-over-year.
New Home Sales Down 1.5% in April
This morning's release of the April New Home Sales from the Census Bureau came in at 662K, down 1.5% month-over-month from a revised 672K in March. The Investing.com forecast was for 680K. Revisions were made going back to 2013 for seasonally adjusted figures.
Imagining the Stock Market in Ten Years
What will the next ten years look like in the U.S. stock market? As we often do, we refer you to one of our favorite songs, “I Can Only Imagine,” and a book by George Friedman, The Next 100 Years. We believe the best performing securities of the next ten years will be very different from the securities and the sectors which currently capture the “popular imagination” of investors.
Field Notes: Hyderabad
The verdict remains out as to whether recent initiatives in India, such as the note ban and the Goods and Services Tax, will constitute significant steps forward in the country’s quest to become a modern and globally competitive industrial economy.
Weighing the Week Ahead: Will Higher Interest Rates Lead to Lower Stock Prices?
The economic calendar is light, and the market week will be shortened. There is no holiday this week, but expect many participants to take off early for a long weekend. If interest remain above 3% on the ten-year note, that will be the focus.
Income...but at What Cost?
There are a lot of suggestions these days about where to get extra income, but less discussion about the cost attached to it. A diversified multi-asset approach can help—and provide additional growth potential. But how it’s designed matters.
Blockchain Will Completely Revolutionize How We Mine Gold and Precious Metals
This week I had the pleasure to attend Consensus 2018 in New York, the premiere gathering for the who’s who in blockchain, bitcoin and cryptocurrencies. Attendance doubled from last year to an estimated 8,500 people, all of them packed in a Hilton built for only 3,000. Ticket sales alone pulled in a whopping $17 million, while event booths—the largest of which belonged to Microsoft and IBM—generated untold millions more.
Treasuries Signaling Full-On Inflationary Boom in the US
Ten-year US treasury rates broke out this week on the back of news that looks unequivocally like an inflationary boom. Earlier in the week the Atlanta wage tracker ticked back up to 3.3% year over year. Wages moving higher, check. Oil prices broke above $71/barrel. Commodity prices higher, check.
Where Can We Beat the Market?
We closed yesterday’s post on whether markets are efficient with the conclusion that it could be possible to beat the market. But, to do so, we would need either better information or to view things differently—specifically referencing time horizons as one way to do that. Let’s start with a couple of areas where better information is a real possibility. Then, we’ll take a deeper look at the second idea, which is both more subtle and more interesting.