"But, but, but, rates have nowhere to go but higher..." is all we have heard for the past year.
But what if that is incorrect?
KesslerCompanies.com quanitifies the upside returns from owning bonds if things don't work out as ebuliently as expected...
The ongoing ETF insanity, which as of the end of August saw Vanguard fund inflows of $1.6 billion every day (or $100 million every single hour) has now boldly crossed over into the political arena, with the upcoming launch of the "MAGA" ETF, which hopes to "make America great again" by investing exclusively in companies that support the Republican Party, and Trump of course.
With soft survey data scrambling the macro traders minds currently (China manu good, services crash; Canada bad - despite surging GDP?), all eyes swing to US data this morning with Markit's Manufacturing PMI weaker than July (though beating expectations modestly) with a "renewed stuttering of the manufacturing economy during August." However, for those who need some good news, ISM's survey of the same manufacturing economy saw them the most exuberant since April 2011!
The biggest money is made when you identify a major trend and get in early.
In early 2017, we forecast to our clients that the $USD would be collapsing this year. At that time the financial media was rife with “gurus” talking about how the $USD was going to roar higher. Indeed we repeatedly read that “2017 was going to be he year of the $USD.”
Since that time the $USD has dropped like a brick against every major world currency.
One of the justifications for today's poor payrolls report is that calendar effects and seasonal adjustments (which oddly are never mentioned when the jobs report is stellar) had an undue influence. And, to an extent, that is true: as the chart below shows, August (and September) have traditionally been the weakest payrolls month over the past two decades.
Conveniently, there is a simple way to normalize for seasonal adjustments: look at unadjusted data.