More From Surbhi Jain
Stay tuned for this must-know manufacturing report this week
Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on markets.
Ray Dalio: ‘We Have Made the 30-Year Top in Bond Prices’
So, if we’ve reached the top in bond (TLT) prices, one can only expect a reversal from here.
Ray Dalio Talks about a Major Reversal in the US
Ray Dalio sees a “profound president-led ideological shift” in the US (SPY) (IVV) (VOO), according to his November 15 post.
Dalio: Stock Market Correlation with Trump Reversed after Election
According to Ray Dalio, the stock market was largely negative on Donald Trump before and immediately after the 2016 US elections. However, the trend shifted after that.
What Paul Krugman Thinks about Japan’s Yield Curve Control Policy
In its latest policy move, the Bank of Japan left rates unchanged and delayed inflation target timings for the Japanese economy (EWJ) (HEWJ) (DXJ).
Paul Krugman: Not the Time to Hike Rates in Great Britain
Paul Krugman is among those who believed that Brexit wouldn’t affect the UK economy negatively.
Krugman: We’re Seeing ‘Japanification’ of Developed World and China
Paul Krugman says he’s witnessing the “Japanification” of the developed world (EFA) (VEA).
Why Krugman Doesn’t Understand the Focus on Trade All of a Sudden
Trade has been a key focus with respect to the US elections lately.
Paul Krugman Sees a ‘Trump Slump’ in the Making
While Krugman agrees that the US economy (SPY) (IWM) (QQQ) has been adding jobs at a good pace and is also closer to full employment, he attributes the achievement to the low-interest rate regime.
Paul Krugman to the Fed: Don’t Raise Rates
Inflation is moving up towards its target, but it still has a ways to go before it gets there. Paul Krugman believes raising rates could keep inflation from reaching that target.
Bill Gross Would Invest in ‘Build America Bonds’
Given the much-talked-about policies around an increase in infrastructure spending in the US, we could see a lot of infrastructure bond issues floating in the market.
Bill Gross Says We Shouldn’t Expect a ‘New Trump Bull Market’
In his investment outlook for November 2016, Bill Gross advises investors to be prepared for lower stock earnings and PE (price-to-earnings) ratios in the future.
Gundlach: Invest in Industrials, Materials, Financial Sectors
“Industrials, materials, and financials are the sectors. . .you want to be invested in,” said Jeffrey Gundlach recently in a CNBC interview.
The Stock Market Is in for a Bumpy Ride, Says Gundlach
Earlier in 2016, Jeffrey Gundlach was quite bearish on the US stock market. At one point, he said that it was “whistling past the graveyard.”
Jeffrey Gundlach on the December Rate Hike: It’s Now or Never
“If the Fed doesn’t raise rates in December, they’re never gonna raise rates again,” said Jeffrey Gundlach during his interview with CNBC on November 11, 2016.
What Are Mario Gabelli’s Top Infrastructure Plays?
In light of a Trump presidency, Gabelli advises investors to bet on infrastructure plays such as Mueller Industries (MLI) and Vulcan Materials (VMC).
What Mario Gabelli Thinks about the Economy
Gabelli seems quite positive about the future of the US economy (SPY) (IWM) (QQQ) (IVV) (VOO).
Trump’s Win Sends the Mexican Peso Reeling
Donald Trump’s win in the 2016 US presidential election wasn’t good news for Mexico (EWW). The Mexican peso fell more than 10% on November 9, 2016.
How a Donald Trump Presidency Could Impact Mexico
Donald Trump’s win in the 2016 US presidential election isn’t good news for Mexico’s economy. Trump’s protectionist intentions could hamper the Mexican economy.
Global Markets React as Trump Wins the 2016 US Election
The results of the general election are out: Republican nominee Donald Trump has won the 2016 US presidential election.
How a Donald Trump Win Could Impact China
Republican presidential candidate Donald Trump stated that he intends to weaken trade links between China and the US, and that he would be likely to introduce trade policies against China.
Can a Trump Win Reverse Emerging Market Gains on Election Day?
The MSCI Emerging Markets Index has delivered positive Election Day returns only twice out of the seven presidential elections that have been held since the index was created. The 1996 and 2004 elections—in which incumbent presidents were re-elected—saw 1.4% and 6.1% returns.
Emerging Markets Have Been Leading Stock Returns in 2016
While developed markets have been caught in a lull, we’ve seen emerging markets grab the spotlight. Emerging markets have been leading stock market returns so far in 2016.
A Trump Presidency: What Are the Odds?
With Hillary Clinton leading Donald Trump in the polls before Tuesday’s US presidential election, the projected results are still uncertain. However, a Trump victory may not be good news for those invested in emerging markets.
Why Trump Sees NAFTA as the Worst Trade Deal Ever
Republican candidate Donald Trump wants to renegotiate NAFTA. Since 1994, NAFTA has created a common trading market between the United States, Mexico, and Canada.
Clinton or Trump: Who Would Add More to Debt Burden in 10 Years?
According to the CRFB, Hillary Clinton’s plan would increase public debt in the United States (IVV) (VOO) by about $200 billion over the next ten years
The Debt Clock Is Ticking: Does the Next President Have a Plan?
The debt clock is ticking in the United States, and at a good pace. The total US (SPY) (IWM) (QQQ) debt is currently $19.8 trillion.
Why Clinton and Trump Believe Their Plans Could Create Jobs
At the third presidential debate on October 19, 2016, Chris Wallace asked the two presidential candidates why they believe their plans could create jobs and growth.
Trump or Clinton: Who Can Boost Economic Growth?
Let’s look at Donald Trump’s and Hillary Clinton’s views on the most pressing issues that the US economy is currently facing, including growth, debt, jobs, and trade deals.
Dalio: What Policies Are Required of Central Bankers?
Ray Dalio: Here’s what’s required of central bankers Given the inadequacy of monetary policy measures to stimulate the economy, we may see “more direct placements of purchasing power in the hands of spenders,” believes Ray Dalio. He has outlined what central bankers should do. “Continue to make debt assets extremely unattractive for savers” For some […]
Ray Dalio: Gold and Riskier Assets Could Become Attractive
Non-financial storeholds of wealth could gain popularity Based on his view expected return relative to risk is going to be bad in the foreseeable future, Ray Dalio has identified two investment avenues that he believes could become more attractive. Dalio suggests that we may see non-financial storeholds of wealth gain popularity. More money may flow […]
Expected Return Relative to Risk is Bad, Says Ray Dalio
Expected returns We’ve discussed Ray Dalio’s opinion on the current market (SPY) (IWM) and economic environment. Now let’s look at his thoughts on the expected return to investors. According to Dalio, the expected return, relative to risk, is bad. Ray Dalio has indicated which conditions have led to him to such belief. These are as […]
Where Are We in the Debt Cycle?
Ray Dalio doesn’t see abrupt crisis Back in 2007, Ray Dalio’s economic principles template “signaled that we were in a bubble and a debt crisis lay ahead.” However, Dalio doesn’t “see such an abrupt crisis in the immediate future.” He has provided two reasons he holds this belief. “Most economies are near the mid-points of the […]
Central Bankers Facing ‘Pushing on a String’ Situation
Central bankers are maxing out on their debt limit “There is only so much one can squeeze out of a debt cycle,” believes Ray Dalio, and central bankers seem to be maxing out on that limit. “In other words, they are simultaneously approaching both their debt limits and central banks’ ‘pushing on a string’ limits,” […]
How Could The Future Be Different? Ray Dalio Weighs In
Ray Dalio sees similarities between now and the late 1930s The last time central bankers faced something similar to the present situation was in the late 1930s. Ray Dalio sees similarities between the current US economic environment and the one in 1937. Asset prices plummeted in 1937, which subsequently dragged down earnings and led to […]
Ray Dalio: What Does the Future Hold?
Ray Dalio shares his view on the economy You won’t find many investors who do not follow Ray Dalio’s views on the economy and markets (SPY) (QQQ) (IWM). During a speech at the New York Fed’s 40th Annual Central Banking Seminar, Ray Dalio had a few things to say about the future. “Debt will not […]
The ‘Three Big Forces’ That Drive All Economies
The “three big forces” Ray Dalio believes that “three big forces” drive all economies. These are: productivity growth the short-term debt cycle the long-term debt cycle An economy has to go through upturns and downturns Central bankers need to study the determinants of productivity for their economy. The determinants could include the costs of education, […]
Ray Dalio: The Economy Is ‘the Aggregate of the Markets’
The economic machine Ray Dalio’s “How the Economic Machine Works” presentation is a treasure trove of information and logic, especially for macroeconomics enthusiasts. In his presentation, Dalio explains three important factors that hold true for any economy (IVV) (VOO): spending drives the economy productivity growth matters the most in the long run debt (TLT) is […]
Ray Dalio: ‘Risks Are Asymmetric on the Downside’
“Risks are asymmetric on the downside” On the economy, Ray Dalio stated that “the risks are asymmetric on the downside, because asset prices are comparatively high at the same time there’s not an ability to ease.” Courtesy of the current global monetary policy’s low interest rates, asset prices are artificially inflated—so much so that they’ve […]
We’re in ‘an Environment of Abnormally Slow Growth,’ Says Dalio
This isn’t a normal business cycle Billionaire hedge fund manager Seth Klarman said, “the stock market is the story of cycles and of the human behavior that is responsible for overreactions in both directions.” Ray Dalio believes that this isn’t a normal business cycle. In our April 2015 series Business Cycle Investing: What Should You Look […]
Unconventional Ray Dalio Speaks to the Fed
During a speech at the New York Fed’s 40th Annual Central Banking Seminar on October 5, Ray Dalio talked about the economy, the business cycle, investment returns, market equilibrium, and the debt cycle. In this series, we’ll elaborate on each of these topics in light of Dalio’s beliefs and relevant data.
What’s Been Helping the UK GDP after the Brexit Vote?
After the Brexit decision, services were a positive factor, while production ended up to be a drag on GDP.
How Saudi Arabia’s Bond Sale Affects US Treasury Bonds
Saudi Arabia has also been involved in the sale of US Treasuries. The country is the 15th-largest holder of US Treasury bonds in the world.
Saudi Arabia Has Been Liquidating Its Reserves to Plug the Gap
The plunge in oil’s price since mid-2014 has had a direct and negative bearing on Saudi Arabia’s public finances.
Oil Has Been Weighing Down Saudi Arabia
Oil is critical to Saudi Arabia. The country is the largest exporter of petroleum, with 18% of the world’s proven petroleum reserves.
Saudi Arabia Enters International Bond Market, Raises $17.5 Billion
On October 20, the government of Saudi Arabia raised about $17.5 billion in an international bond issuance, marking the emerging market’s first foray into the international bond market.
Clinton Supports and Trump Opposes the TPP Trade Agreement
Another regulation that Donald Trump and Hillary Clinton view differently is the TPP (Trans-Pacific Partnership). The TPP is a trade agreement.
Clinton Wants to Impose a ‘Risk Fee’ on Large Financial Firms
Hillary Clinton supports the Dodd-Frank Wall Street Reform Act. Clinton proposed a “risk fee” on the largest financial firms.
Russia Retaliates against the US for Imposing Sanctions
The Russian government expressed its willingness to get back at the US. The economy’s growth has been impacted by trade and economic sanctions.
Why Did Russia Suspend Its Agreement with the US?
On October 3, Russia suspended a treaty with the US relating to cleaning up weapons-grade plutonium. The agreement was signed in 2000.
Gross Notes Investors’ Shift to Less Risky Alternatives
Central bankers can only hope to stimulate the economy with lower and lower rates as long as there are takers for their low or negative yielding sovereign debt.
Bill Gross Explains Why Central Bankers Can’t Keep Raising Stakes
In his investment outlook for October 2016, Bill Gross of Janus Capital (JNS) compared the central bankers’ recent monetary policy measures to wagers placed at a betting game.
What Are Jeffrey Gundlach’s Views on Gold and the US Dollar?
Gundlach also had something to say about assets other than bonds and stocks like gold (GLD) and the US dollar (UUP).
Gundlach’s Advice to Japanese and European Investors in US Treasury
US Treasuries are set for their second consecutive month of losses for the first time this year.
Jeffrey Gundlach: Where’s the Bond Market Heading?
Gundlach observes that the two-year Treasury yield has bottomed out, while the five-year Treasury is also almost double its mid-2012 lows.
Why Jeffrey Gundlach Believes Inflation Could Rise
Another indicator that bond king Jeffrey Gundlach of DoubleLine Capital follows closely is the ECRI US Future Inflation Gauge (or FIG).
Gundlach Says This Chart Is ‘Early Warning Indicator’ of Recession
Jeffrey Gundlach seems quite bearish in his views about the US economy (IWM) (QQQ).
Jeffrey Gundlach Highlights the Irony in Earnings Expectations
Operating earnings grew 5.1% in 2012, 5.4% in 2013, 4.9% in 2014, and -2.4% in 2015.
Gundlach Looks for Evidence that Negative Rates May Support Markets
With developed markets such as Japan (EWJ) and Europe (FEZ) (VGK) resorting to negative rates, it only makes investing sense to analyze how negative rates stand to affect stock markets.
Jeffrey Gundlach: The Fed Has Been Supporting the S&P 500
Gundlach also believes it’s interesting to look at the correlation between the size of the Fed’s balance sheet and the S&P 500 (SPY) (SPXS) (SPXL) level.
Do the Markets Support a Rate Hike?
Back in November 2015, Gundlach presented what he called “the most bearish chart of the US economy” during a webcast.
US Nominal GDP Seems to Be Signaling a Recession
During his latest webcast, “Turning Points,” Jeffrey Gundlach presented a chart that seems to be signaling a recession in the making.
Ray Dalio to Bond Investors: We’re There!
In a recent appearance at the Delivering Alpha conference, Ray Dalio commented on the amount and nature of debt in the global (VTI) (ACWI) economy.
Investors Beware: Duration Risk Has Risen across the Bond Market
If you’re a bond (BSV) (AGG) investor or fund manager, fluctuation in interest rates is one of the key risk drivers for the returns you get from your portfolio.
Ray Dalio: Bonds Haven’t Had a Bear Market in Decades!
“The potential for relatively big losses in bonds worries us because bonds effectively haven’t had a bear market in decades,” said Ray Dalio.
Ray Dalio: The Next Downturn May Be a Difficult One to Reverse
“The next downturn may be a difficult one for central banks to reverse,” warned Ray Dalio, CEO of the world’s largest hedge fund.
How Chile’s Stock Market Continues to Find Support
Chile (ECH) continues to be the lowest-risk country in Latin America (ILF). It’s one of the best-evaluated economies in its region.
Will the Copper Price Rebound Continue to Support Chile’s Surge?
The price of copper has increased from around $4,470 per metric ton in January 2016 to more than $4,800 per metric ton in July 2016. That’s a rise of 7.4%.
What Argentina’s Capital Flows Suggest about Valuations
Argentina’s capital markets (ARGT) saw a net of $869 million of funds flowing into the country’s portfolio investments in the first half of 2016.
Is Argentina Back in the Game, or Are Dark Clouds Here to Stay?
For more than a decade, the outgoing party’s continual resistance to honoring debt led to Argentina’s exclusion from international financial markets.
Investor Sentiment Favors Peru, Chile, and Brazil
Investor sentiment with respect to Latin American economies has definitely been changing since the beginning of the year.
Investing in Latin America Can Bear Fruit, but Should We?
With commodity prices recovering and major developed markets (EFA) (VEA) caught in the lull, Latin America should see sunnier days ahead.
World’s Largest Hedge Fund Is Bullish on Emerging Markets
Hedge funds assets invested in emerging markets rose by $4.7 billion in the second quarter to end 2Q16 at a total of $189.8 billion.
Has Investor Sentiment Turned in Favor of Emerging Markets?
With fears abating, BlackRock is now more confident about emerging markets’ fundamentals being instrumental in driving growth in global economies.
Lower Rates, Dollar, Commodities Aid Emerging Markets’ Recovery
It’s been a good year for emerging markets so far. Performance and growth have been aided by the stability of the US dollar, the commodity price recovery, and lower rates in developed markets.
Bill Gross’s Views on Growth and Inflation
Gross believes that money has stopped generating growth and inflation. Equity prices are artificially elevated, and negative yields are guaranteeing capital losses.
Amazon Has Teamed Up with Wells Fargo in Student Loan Business
Amazon (AMZN) is looking to enter what has become a billion-dollar student loan industry in the United States.
Why Student Debt May Not Affect the US Economy Like Sub-Prime
According to the White House Council of Economic Advisers, “Student debt is less likely to make a recession more severe or slow an expansion in the way that mortgage debt may have.”
Millennials or Baby Boomers: Who’s Affected Most by Student Debt?
The Baby Boomer generation has also been increasingly contributing to the student debt crisis.
US Student Debt: A $5,000 Debt Needs More Attention Than $100,000
A small-ticket loan of $5,000 could be more harmful to the health of the US economy (SPY) (IWM) (QQQ) than a $100,000 loan.
The $1.3 Trillion Student Debt Bubble
The rise in the balance of student debt has been driven by an increase in the number of borrowers and a rise in the average debt by each student.
Why Is College Education So Expensive in the United States?
The rise in delinquencies on student loans in the United States (SPY) (IWM) (QQQ) can be partially attributed to the accelerated rise in college tuition and fees.
Is the Financialization of Education Leading to a US Bubble?
The financialization of education, especially in the United States (IWF) (IWD), has led to an important and emergent risk to the country’s economic future.
Is Student Debt the Next Bubble to Hit the US Economy?
Many are likening the current student debt situation in the United States to the mortgage debt situation that led to the 2009 financial meltdown in the US economy.
Is Brexit Underscoring the US Corporate Bond Market’s Strength?
When uncertainty rises, equity markets become volatile, and bond spreads rise. Brexit is likely to have a similar effect on capital markets.
How Brexit Could Impact GDP, Capital Flows, and Growth in the UK
According to the International Monetary Fund’s World Economic Outlook Database, the UK’s GDP was $2.7 trillion in 2015.
Maintaining EU-UK Trade Relations: What Choices Does the UK Have?
Chances are high that a favorable trade agreement will be reached between the United Kingdom and the European Union (or EU) after Brexit.
Will the UK Continue to Be a Tax Haven for Businesses?
The United Kingdom has long served as a tax haven for multinational corporations. Over time, we’ve seen big names establish their tax bases in the area.
Will Brexit Weaken the UK’s Competitive Advantage over the US?
On Brexit, import restrictions and tariff quotas currently applicable to importers in the UK and foreign businesses that export to the UK are set to change.
Could Exiting the EU Leave the UK on Stronger Footing?
Contrary to popular opinion, there are certain areas of opportunity that Brexit could bring to the UK.
Service Sector’s Contribution Has Been Rising in the UK
Let’s now take a look at specific risks that could arise for businesses as a consequence of Brexit.
A Cost-Benefit Analysis of the Brexit Decision
To understand how the Brexit result stands to impact your portfolio or your willingness to invest in the United Kingdom, a cost-benefit analysis is pertinent.
Immediate Impact of the Brexit Result: Volatility Up, Markets Down
The Brexit results that came out on June 23, 2016, in favor of the Leave vote contributed significantly to market uncertainty and price volatility.
Valuation Expert Aswath Damodaran Weighs in on Tesla’s Stock
How markets see Elon Musk converting his vision for Tesla into reality is what fascinates investors already invested or interested in the stock.
Understanding Damodaran’s Execution Concerns with Tesla
What concerns Damodaran most is weak execution, which has become a core feature of Tesla—he’s not entirely confident that Tesla can actually deliver.
Bill Gross: Possibility of Deglobalization in the Economy
Gross warned about deglobalization in the global economy. Trade between nations, exacerbating immigration issues, and stagnant economic growth formed his belief.
Bill Gross: What’s His New Normal Thesis?
Recently, Gross has been repeatedly mentioning a “new normal” that the developed world seems to be in. Real GDP growth is around 2% in the US.
Lower Rates Aren’t Equating to Higher Equity Prices
Bill Gross provided his view on lower rates no longer resulting in credit creation in the economy. They have also lost their efficacy in raising equity prices.
What If Low Interest Rates Don’t Result in Increased Lending?
With most of the developed world at near zero or negative yields, the contribution of lowering interest rates to the velocity of money is diminishing.
Bill Gross: Credit Is the Oil That Lubes the System
Currently, we’re in a highly levered system, especially the developed world. A levered economy depends on continued credit creation for stability and growth.