Anticipation Is Worse Than Reality

We have seen this story before in the post crisis period. Bond yields start rising amid the swelling expectation that any of the following events are soon to take place: a long awaited sustained economic recovery, a sustained rise in inflationary pricing pressures, and/or a sustained rise in central bank interest rates. During each past episode, interest rate segments of capital markets struggle with the anticipation. But once the eventual reality finally sets in, these segments suddenly find themselves rallying and more than making up for any lost ground in the process. Today, investors once again find themselves experiencing the latest act in this repeated performance. And it is likely that events will play out similarly this time around too.

Please click on the link to read more of my article on Seeking Alpha.

Bond Rout: Time To Run Or Time To Buy?

The global bond market has been taking it on the chin lately. After reaching historic lows in many parts of the globe only a few weeks ago, bond yields have suddenly exploded higher. This sharp and sudden move has raised questions as to whether we are finally arriving at the point where the long anticipated global bond market correction is finally about to get underway. But while the moves have been big in recent weeks and investors are right to be paying close attention, another question that investors may also be well served to consider is whether it may soon be a good time to buy following the recent pullback.

Please click on the link to read more of my article on Seeking Alpha.

The Black Cloud Still Looms Large

The oil market continues to search for any signs of life. Since June 2014, oil prices have fallen by nearly 60%. And while both West Texas Intermediate and Brent crude prices are still trading above the lows from earlier in January, the trend remains definitively down. This bodes ill for capital markets in general and the high yield bond market in particular.

Please click on the link to read more of my article on Seeking Alpha.

Fires Still Burning In The Oil Patch

The massive decline in oil prices over the last several months has clogged the headlines. Investors certainly have no shortage of opinions to sift through in trying to determine how the recent events in oil might impact the economy and financial markets going forward. Such viewpoints range from those predicting widespread negative spillover effects to others celebrating the boost to the economy and the attractive investment opportunities now available across the energy sector. This can leave many investors feeling confused about what actions if any they should take in response. At times like these, it is often helpful to begin by taking the simplest approach, which is to look at what prices alone are telling us. So far, they suggest that fires are still raging across the oil sector and that more challenges may lie ahead.

Please click on the link to read more of my article on Seeking Alpha.

Has QE3 Really Come To An End?

In October, the U.S. Federal Reserve carried out its final asset purchases as part of its latest asset purchase plan designed to help stimulate economic growth. This included the purchase of $10 billion in U.S. Treasuries and $5 billion in Mortgage Backed Securities in the final month. Given that the program is now over, it would be reasonable to expect that the Fed’s balance sheet would not longer be expanding in a meaningful way. But this has not been the case in the weeks since the end of the program. As a result, it is reasonable to question whether QE3 has really come to an end.

Please click on the link to read more of my article on Seeking Alpha.


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