Recent inflation fears have helped lead to a sell off in bonds. From a total return perspective, the 30-year US treasury has declined by 13% and the 10-year US treasury has declined by 6% over the past 100-days.
The high yield spread over the 10-year treasury has synced up to changes in breakeven inflation.
Emerging-market stocks have suffered from a Trump-induced hangover after surging through the first 10 months of 2016. We think investors should put the new risks into perspective.
The 200-day correlation between US stocks and the MSCI World Index is currently 45%. This is the second lowest level since 2008. The only time the 200-day correlation was lower was in July 2014.
The recent backup in yields is happening at an unfortunate time. In nominal terms, debt held by the public is at an an all-time high (approximately $14.3 trillion).
It has certainly been a good couple of weeks for financial stocks. But the good times still haven’t been good enough to bring bank stocks out of last place among 24 developed market industry groups.
Since the introduction of the National Income and Product Accounts (NIPA) in 1946, the US has experienced 11 recessions.
As U.S. equity markets continue to forge new highs, we take a look at our strong and weak close indicators to gauge investors’ conviction levels in the latest moves.
Listen, before we go through a litany of economic charts that pour some cold water on the recent bout of optimism regarding US economic growth prospects we want to stress that we don’t believe economic growth is about to fall off of a cliff.