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Oh yeah, forgot that CSU was doing OK.CSU, our best Canadian tech stock... is up +0.84%, lol.
I don't hold SHOP but holy cow, does this thing fall 10% every day now? What a ridiculous stock.
Oh yeah, forgot that CSU was doing OK.CSU, our best Canadian tech stock... is up +0.84%, lol.
And if we are referring to the US Federal Funds Rate the futures show it peaking a touch over 4% next May.I just got an update from my Bay Street contacts who say the derivatives market now points to 3.5% policy rate at year end.
Thanks, I didn't realize they're forecasting over 4% into next year. That's becoming a respectable level.And if we are referring to the US Federal Funds Rate the futures show it peaking a touch over 4% next May.
The issue is a more nuanced. Within the bloc the spread between rates of different countries sovereign debt has widened because of the different riskiness of some countries (eg Greece, Spain versus Germany). They need to keep the spread under control or the Euro will be no more. Expect measures to control the spread, not an about face on tightening.El Oh El … ECB is already giving early signals of capitulation :
European Central Bank announces emergency meeting to discuss market rout
Yes, fair enough -- one could say this planned "anti-fragmentation instrument" to save Italy and friends is a measure to save the eurozone. The core of it in my view of things anyway is still overindebted sovereigns and unwillingness to accept the austerity needed to repay the debt. Instead, they will socialize the losses through "not QE" and the release valve will be debasement of the euro.The issue is a more nuanced. Within the bloc the spread between rates of different countries sovereign debt has widened because of the different riskiness of some countries (eg Greece, Spain versus Germany). They need to keep the spread under control or the Euro will be no more. Expect measures to control the spread, not an about face on tightening.
I missed this part. Disagree here though I'm sure they'll find a way to call it not QE.Expect measures to control the spread, not an about face on tightening.
FYI It’s Fathers Day this weekend.I hate to say this, but late last year my parents were happy to tell me that their financial advisor finally convinced them to buy a bit of stocks (they were 100% GICs). Something like 20% of their portfolio. Maybe because they could afford a bit more risk, maybe because I kept talking how I was 100% stocks, maybe because I said stocks aren't risky when they are part of a diversified portfolio.
Not sure how they feel at the moment. Not sure how their financial advisor deals with their reaction.
When someone bought GICs their whole life and their first experience in stocks is a -20% drop within a few months, that's one cold shower, even if it's only 20% of their portfolio in stocks.
I guess the right way to see this is their whole portfolio only dropped -4%.
I think this kind of experience is a big reason people don't invest in stocks, or try it once (or twice), get burned and never invest again.When someone bought GICs their whole life and their first experience in stocks is a -20% drop within a few months, that's one cold shower
It's interesting because I have a lot of success doing the same thing the past few yearsWall Street loves it when you trade. They love it when you watch your account and go through cycles of fear & greed. Goldman Sachs will consistently trade against you, because they know how (amateur) humans tend to react to markets. Our trades and impulses are a way to hand over money to Goldman Sachs & friends.
Article is referring to market conditions before the Fed meeting, over a week ago. It’s -0.11 now. Not to dismiss out of hand but that was a while ago. I can expand on credit indicators if interested, there are better signals.This is potentially a bigger deal than just the stock market declining. Pinging @Covariance
Some junk bond ETFs are trading at steep discounts to NAV
HYG was 1.2% below NAV
JNK was 1.8% below NAV, the worst dislocation since 2016
This means liquidity in junk bonds is very poor. This is showing credit stress. It doesn't necessarily indicate a crisis, but does show liquidity disappearing.
It might also make the Federal Reserve more cautious about aggressive tightening.
Good point. Sure, I am curious: what are other credit indicators can one look at?Article is referring to market conditions before the Fed meeting, over a week ago. It’s -0.11 now. Not to dismiss out of hand but that was a while ago. I can expand on credit indicators if interested, there are better signals.
Spreads for sure - HY, and IG OAS Index s Keep in mind, while every recession has been preceded by a ballooning of credit spreads, not every ballooning of credit spreads is followed by a recession. (Similar to the infamous 10-2 lol).Good point. Sure, I am curious: what are other credit indicators can one look at?
One I'm aware of is high yield spreads versus treasuries. Any other good ones?
This may become especially important as QT accelerates through this year, especially after September when the Fed really drains liquidity out of the system.
That's a very good list! I would add to the list, to keep an eye on emerging market bonds and EM currencies as situations like dollar strength can result in forced deleveraging and plummeting EM. We seem to be getting a bit of that happening right now but it's too early to tell.Spreads for sure - HY, and IG OAS Index s Keep in mind, while every recession has been preceded by a ballooning of credit spreads, not every ballooning of credit spreads is followed by a recession. (Similar to the infamous 10-2 lol).
Commercial and industrial loans issuance. And commercial real estate loans issuance
VIX
Spreads on commercial paper
30 year residential mortgage level
treasury nominal and real yields across the curve
to name a few.