Authored by Lance Roberts via RealInvestmentAdvice.com,
With Thanksgiving week rapidly approaching, I thought it was an apropos time to discuss what I am now calling a “Turkey” market.
What’s a “Turkey” market? Nassim Taleb summed it up well in his 2007 book “The Black Swan.”
The latest monthly Fund Manager Survey by Bank of America confirmed what recent market actions have already demonstrated, namely that, as BofA Chief Investment Strategist Michael Hartnett explained, there is a "big market conviction in Goldilocks leading to capitulation into risk assets" while at the same time sending Fund managers' cash levels to a 4-year low, and pushing "risk-taking" to a new all-time high, surpassing both the dot com and the 2007 bubbles.
Authored by Charles Hugh Smith via OfTwoMinds blog,
In this scenario, time is running out for Saudi Arabia's free-spending royalty and state - and for all the other free-spending oil exporters.
With a December rate-hike baked into the cake (odds as close to 100% as possible), the hotter-than-expected PPI print has sparked notable outperformance in the long-end (amid Fed-driven slowdown fears) sending the yield curve to new cycle flats - flattest since 2007...
The last two times the yield curve was this flat, the US economy was in recession...
As a reminder, it took The Fed driving rates up to 5.25% before financial conditions finally snapped tighter...
Following September's hotter-than-expected Core PPI (and 5Y high in PPI), October was expected to see a modest slowdown but headline PPI printed a massive 2.8% YoY (smashing the 2.4% exp). This is the hottest PPI since Jan 2012, driven by surges in fuel prices and drugs.
Core PPI also beat expectations, rising 2.4% YoY (vs 2.2% exp) - also the highest since Feb 2012...
Under the hood...