It appears David Stockman's warnings over the looming debt ceiling debacle has sparked some investors to face up to reality once again. The Treasury-Bill yield curve has inverted further and swap spreads soared to five-year highs.
With bond and stock markets having recently bifurcated, signalling two distinctly different outlooks on the future of the reflation trade, the confusion among the "smartest money" persists.
Close up this looks even more divergent.
Friday was the 6th day in a row that The Dow and the Long Bond have
risen in price together... equal record longest streak (1989 and 1994)
One and a half years after the Chinese government violently burst the stock market bubble, leading the massive losses among retail investors, and months after China's third housing bubble since the financial crisis appeared to have peaked, also China has found itself with yet another hot-money funded bubble: commodities.
Via Nick Cunningham of OilPrice.com,
Canada’s oil sands could struggle to rebound, with potentially billions of barrels of oil being kept underground permanently.
Traders are on edge ahead of tomorrow's key address by President Trump to Congress, in which as Bloomberg writes "trillions are at stake."
Since Trump’s election, the S&P 500 has risen by 10%, posting 17 record closes in a rally that’s added $2.8 trillion in value to the U.S. equity market, with economists divided on how much of the rally is due to hopes from Trump's pro-growth promises, how much due to corporate earnings growth (which are expected to rise 12% from last year's energy-depressed levels), and how much due to the organic growth of the economy.