Some time ago, Deutsche Bank's chief international economist, Torsten Slok, presented several charts which showed that "Canada is in serious trouble" mostly as a result of its overreliance on its frothy, bubbly housing sector, but also due to the fact that unlike the US, the average household had failed to reduce its debt load in time.
Authored by Wolf Richter via WolfStreet.com,
It will be ignored until it’s too late.
Everyone who’s watching the stock market has their own reasons for their endless optimism, their doom-and-gloom visions, their bouts of anxiety that come with trying to sit on the fence until the very last moment, or their blasé attitude that nothing can go wrong because the Fed has their back. But there are some factors that are like a tsunami siren that should send inhabitants scrambling to higher ground.
The fractures within OPEC's precarioua production cut agreement are becoming increasingly more visible.
While the Fed's traditionally drab Beige Book is routinely ignored by the market, especially on blockbuster days like today when Janet Yellen turns dovish again and then speaks for nearly 4 hours in the Senate, this time there were several notable highlights in the just released July edition, not least of all the apparent downgrade of the low end of overall economic activity, which for the first time described the pace of growth as "slight to moderate" versus its staple "modest to moderate."
One day after the Treasury sold 3Y paper in a surprisingly strong, "stopping through" auction when equities were hit by the surprising Trump Jr. news, moments ago the Treasury sold $20 billion in a 9-year 10-month (Cusip X88) reopening, which stopped at a yield of 2.325%, a 0.4bps tail to the 2.321% When Issued and the fourth consecutive tailing 10Y auction. The high yield was above last month's 2.195% and the highest since May's 2.4%.