Goldman Sachs (GS) has long been bullish on gold. In March 2018, the bank turned positive on gold (IAU) for the first time in more than five years. It’s since been advising investors to turn defensive due to its forecast of increased risk, recommending that investors go for high-quality stocks and gold.
While the markets aren’t expecting any changes in rates following the meeting, they’re keenly awaiting the Fed’s strategy to deal with strong economic growth accompanied by low inflation (TIP).
The US Bureau of Economic Analysis released its personal consumption expenditure (or PCE) price index today. The PCE index is the Federal Reserve’s preferred gauge of inflation.
As far as the Fed’s next moves are concerned, Gundlach said that if the market forces are allowed to prevail, interest rates should go up even in the next downturn.
Morgan Stanley (MS) equity strategist Michael Wilson said that investors should “remain defensively positioned,” as last week’s yield curve inversion was bearish for stock markets (DIA) (IVV).
According to the gold demand trend for Q4 2018 released by the World Gold Council, central banks are on the biggest gold (GLD) buying spree in the last 50 years.
In December, Gundlach said, “I’m pretty sure this is a bear market.” He pointed out that even FAANG stocks—Facebook (FB), Apple (AAPL), Amazon (AMZN), Netflix (NFLX), and Google (GOOGL)—were in or near a bear market.
Dalio said that the rates are almost zero in Europe (HEDJ) and Japan, and in the US (SPY) (DIA) rates are near 300 basis points, so the overall ability for the central banks to avert a downturn is limited.
Jim Paulsen, The Leuthold Group’s chief investment strategist, thinks that after the ugly December for markets, investors’ panic is in the later stages.
While talking to CNBC in September, Ray Dalio said that investors should get “more defensive” in the stock market, and warned that stocks’ upside looks limited.
As reported by CNBC, Ray Dalio feels that “the world by and large is leveraged long,” believing that the next bear market could be very painful as most are not prepared for it.
Another concerning statistic that came to light during the Bank of America Merrill Lynch’s Fund Manager Survey was that investors made the largest ever one-month rotation into bonds (BND).
Bank of America Merrill Lynch conducted a survey that polled 243 global investors with $694 billion in total assets under management between December 7 and December 13.
Whether the recent sell-off in the bond and stock markets is just a blip or the beginning of a sustained downward rally will depend on the upcoming US economic data.
In this annual letter to shareholders, Buffett explained a bet between him and his counterpart, Protege Partners, to fund a charity, Girls Inc. of Omaha.
In its December monetary policy statement, the Fed projected three interest rate hikes in 2018 and three in 2019, depending on the incoming economic data.
Could yield curve inversion be avoided? St. Louis Fed president and CEO James Bullard gave a presentation at a regional economic briefing on December 1. Previously, we looked at the causes of yield curve inversion. In this part, we’ll review Bullard’s suggestions to avoid yield curve inversion. Bullard said that yield curve inversion could be avoided […]
St. Louis Fed president and CEO James Bullard gave a presentation at a regional economic briefing on December 1. Throughout this series, we’ll analyze Bullard’s take on the risks of an inverted yield curve.
The report from the Joint Committee on Taxation included an estimate of budgetary deficits for 2018–2027. Tax reforms could have a limited impact in 2018.
A few days before the US Senate approved its own version of the Tax Cuts and Jobs Act, 137 economists signed an open letter supporting the proposed bill.
The inability of employers to find suitable workers is leading to wage increases, especially in the professional, technical (XLK), and production (XLI) sectors.
The Beige Book, a source of data for the FOMC, gives investors in the bond and currency markets an idea of the future course of the Federal Reserve’s policy.
Williams suggested that the monetary policy framework should be designed considering the global scenario rather than central banks looking at their economies in isolation.
With global economies progressing toward normalcy or the “new normal,” as Williams called it, central banks are moving toward normalizing policy by signaling interest rate hikes.
John Williams, president and CEO of the Federal Reserve Bank of San Francisco, spoke on November 16, 2017, at the 2017 Asia Economic Policy Conference in San Francisco.
The Job Openings and Labor Turnover Survey (or JOLTS) report for September came out on November 7. Job openings remained unchanged at 6.1 million as of the last business day in September.
Green bonds carry the same risk-return profile as conventional bonds. However, these bonds fund projects focused on energy efficiency, clean water, transportation, biodiversity, and sustainable waste management.
US bond markets (BND) experienced volatility last week as markets reacted to the FOMC statement, the nomination of the new US Federal Reserve chair, and mixed economic data.
In a speech at the 2017 Herbert Stein Memorial Lecture, Fed Chair Janet Yellen shared her thoughts on monetary policy for the future and discussed whether there will be any role for unconventional policy again.
US Federal Reserve Chair Janet Yellen, in her speech at the 2017 Herbert Stein Memorial Lecture, explained the challenges that faced the US Fed when it wanted to scale back its monetary accommodation from QE1, 2, and 3.
The US Federal Open Market Committee (or FOMC) is expected to leave rates unchanged and maintain the Fed funds range at 1.0% to 1.25% at its November meeting.
At the last FOMC (Federal Open Market Committee) meeting on September 20, 2017, Fed members decided to initiate a balance sheet normalization process starting in October.
Positive economic data, higher chances for tax reform, and the possibility of a market-friendly Fed chair spelled trouble for the US bond markets last week.
US bond markets (BND) saw some recovery last week. Overheated expectations for a December rate hike cooled off after the FOMC meeting minutes were reported.
The Job Openings and Labor Turnover Survey is a forward indicator of economic activity. The US Fed takes this measure into consideration when making monetary policy decisions involving interest rates.
