10/30/2013 0 Comments
equities before the fed
The equity markets are hitting record highs once again and many analysts are becoming more bullish by the day. The moves by the Fed today (many believe they will delay tapering until next year) will at best reaffirm the levels we have already reached thus far. Without any strong data coming out globally to defend the rise in equity markets the threat of tapering on the horizon, or the talk of bubbles being formed by the fed, will no doubt be a significant headwind to the rally in the coming months. I would use any rally from the fed talks as an opportunity to take profits on winners or place shorts on speculative plays that seemed to have run too far too fast.
10/17/2013 0 Comments
Treasuries rally... for now
The 10 yr has seen a pullback since the 3% yield reached at the height of the tapering concerns. After today it looks like bonds are very much back in vogue on the back of a debt talk deal and the thought that the 16 day government shutdown will cause enough economic harm to prompt the Fed to delay tapering, or even add to QE. This bond rally may go on for a few days or even weeks, but it will not last, the Fed will still rely on the data to determine the tapering time line, and the fact that this whole process could occur again in the beginning of February will not instill too much confidence in US Treasuries. The US has started a process that will ultimately cause the rest of the world to look for alternatives to store their money (though currently there aren't other options). This will cause the markets to looks solely on the economic data to drive the prospect of QE, without that, there are no more reasons for bonds to be in demand like they have in the past.
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