Business

Discussing the market's ongoing reaction to the schizophrenic split between the hawkish Fed and a market which now sees a 50% lower terminal Fed Funds rate than the FOMC, yesterday Jeff Gundlach said that the flattening yield curve could become a concern for US economic growth when two and three-year notes yield about the same.

"Lower CPI in the next couple of months will be a cold bucket of water for the Fed tightening dreams," Gundlach said. "Commodities are super weak, with the dollar down year-to-date, no less."

In a stunning development involving Canada's largest alternative lender which as recently as a month ago was facing virtually certain insolvency after a furious depositor run drained it of liquidity, overnight Home Capital Group announced that billionaire Warren Buffett's Berkshire Hathaway will indirectly acquire C$400 million ($300 million) of the firm’s shares in a private placement through its Columbia Insurance unit, for about a 38.4% stake, and will aso provide a new C$2 billion ($1.50 billion) line of credit to its unit Home Trust Co, ending the Canadian lender's strategic review pro

As the global equity research market continues to wrestle with how they will comply with the European Union's MiFID II regulations, McKinsey & Co. has just penned a new study effectively saying they'll have no choice but to fire a ton of equity research analysts who write a bunch of stuff that no one ever reads...which seems like a reasonable guess.  Per Bloomberg:

America’s beleaguered millennials received a rare gift on Tuesday: A scrap of good news. Even with the aggregate student debt burden eclipsing the $1 trillion mark, and wages pressures across the US economy remaining relatively subdued, a new survey from Bankrate.com claims that Americans’ savings habits are improving for the first time in a decade, with the strongest gains recorded among the 18-26 demographic.

As global central bank exuberance suppresses equity volatility, emerging markets are catching up (or down).

Expected uncertainty in Emerging Market Equities has never been lower... (in fact EEM implied vol is now less than half its lifetime average of 29.7%)

However, as Bloomberg notes, the Federal Reserve’s hawkish posture last week sets the stage for an uptick in developing-nation volatility in the second half of the year, Bank of America Merrill Lynch strategists said.

Oh and there's one more thing...