Business

Authored by Lakshman Achuthan and Anirvan Banerji via Bloomberg.com,

Analysts shouldn’t dismiss the yield curve’s message just because inflation expectations have been declining in recent years.
 

When it comes to the economic outlook, the bond market is smarter than the stock market. That Wall Street adage appears to be on the money from a cyclical vantage point, with key indicators in the fixed-income markets independently corroborating slowdown signals from the Economic Cycle Research Institute’s leading indexes.

Very quietly, in the last few days, cross currency basis swaps (CCBS) related to the dollar have reversed their rise and started collapsing deeper into negative territory… again. This might not be of much interest to buyers of global equity markets at this point, but it is signalling ominous signs of growing funding stress in the financial “plumbing”.

There is a fascinating table in JPMorgan's 2018 year-end outlook released overnight, previewed yesterday by head quant Marko Kolanovic: it shows that a funny thing happened as the so-called experts were looking for signs of retail euphoria (and repeatedly were unable to find it): everyone went "all-in" stocks, and not just retail investors and US households, but mutual funds, hedge funds, pensions, systematic, and sovereign wealth funds.

Well - for now - that was an anti-climax...

• *RUBIO IS SAID TO BACK TAX BILL AFTER CHILD CREDIT TWEAKS: CNBC
• *BRADY SAYS HE HAS ALL SIGNATURES HE NEEDS, "IT'S DONE"

But the market seems unimpresed by the 'news'

And even "high tax" names are underperforming...

Authored by Kevin Muir via The Macro Tourist blog,

I have had some bad trades in my day. But lately, one call has been especially atrocious.