Why Equity Markets Continue to Remain Unaffected by the FOMC
The US equity markets (SPY) haven’t seen any major impacts from the Fed’s policies in the recent past.
The London attack has added to the political uncertainty that is prevailing in the UK—and only days before its general elections scheduled for June 8.
The VanEck Vectors Investment-Grade Floating Rate ETF (FLTR) has an effective duration of 0.14 years. It protects you from rising interest rates.
Will France’s Election Outcome Pressure the ECB?
The European Central Bank (or ECB) likely let out a huge sigh of relief after Emmanuel Macron emerged victorious in the second round of the French elections.
Since the previous Fed meeting in March, where the Fed announced a 0.25% rate hike, equity markets (IWV) around the globe remained dovish.
Another cycle that is closely related to the business cycle is the credit cycle, the expansion and contraction of access to credit in an economy.
What Caused the Muni Defaults in 2016?
In 2016, Puerto Rico defaulted on constitutionally guaranteed GO (general obligation) bonds. On May 3, 2017, Puerto Rico filed for Title III bankruptcy.
Compared to a corporate bond with a similar credit rating, muni bonds are less likely to default while offering modest yields.
In this series, we will shed light on Moody’s recent data report, US Municipal Bond Defaults and Recoveries, 1970–2016. Muni bond prices sparked in 2016, especially when President Trump announced his infrastructure spending plans.
Why Bond Market Uncertainty Could Be Here to Stay
Investors in the bond market remain anxious that there has been no clear signal from the Fed.
Equity markets consider rate hikes to be negative on stocks, but that doesn’t seem to be the case now, likely because the rate is only now being “normalized.”
As per the latest JOLTS report, about 2.1 million Americans quit their jobs voluntarily in August, which was a decrease of 70,000 from the previous reading.