Business

One year after Argentina emerged from its latest sovereign bankruptcy, and at a time when the Latin American nation grapples with a surging budget deficit, Argentina surprised markets by announcing (on Twitter) its intention to sell its first 100-year bond, taking advantage of a world starved for yield.

In a unexpectedly gloomy note from BofA's Chief strategist David Woo, titled "Sell before it's too late", the analyst writes that this is "a market with risk off written all over it" largely as a result of a string of weaker-than-expected US data over the past week, which "has only strengthened our view that the US economy is losing momentum" and adds that the culprit is the lack of progress in tax reform in Washington.

So as the week begins...

• Global equities are higher, fueled by Emmanuel Macron’s big win in France’s National Assembly election.
• The euro is virtually flat versus most major currencies as the election results were well anticipated by the markets.

Can both explanations really be true? Yes, they sure can. Bloomberg's Richard Breslow explains...

While investors pile into Tech Stocks based on endless promotion from the financial media, the US economy is rolling over.

Last week the NY Fed downgraded its economic forecast for 2Q17 to just 1.9%. Even worse, it is now forecasting 2017 total growth to be a measly 1.5%.

Yes, 1.5%.

There is a clear trend to this chart… and it’s NOT up.

Source: NY Fed

Wait, it gets worse.

The Citi Surprise Index has collapsed to levels not seen since 2011.

Source: Yardeni Research

Why does this level matter?

In an otherwise relatively quiet week in which the only upcoming US data is housing, current account and jobless claims, UK politics will again draw attention, one year (on Friday) after the Brexit referendum and as noted earlier, Brexit negotiations begin on Monday, despite lingering political uncertainty in the UK. Also no less than 9 FOMC members are scheduled to speak this week.