Please join Doug Noland and David McAlvany this coming Thursday, January 23rd, at 4:00PM Eastern/ 2:00pm Mountain time for the Tactical Short Q4 recap conference call, “Surviving an Equities Melt Up” Click here to register.
ETF.com: “…Investors kept plowing money into U.S.-listed ETFs. A cool $13.4 billion flowed into the space during the week…, sending year-to-date inflows to $35.2 billion, well ahead of year-ago levels of $8.4 billion.”
Bloomberg: “Global currency volatility has dropped to the lowest level ever recorded.”
Bloomberg: “Bond managers are starting to contemplate the prospect of another decade without a Federal Reserve interest-rate hike.”
Bloomberg: “Forward price-to-earnings ratios for U.S. growth stocks have reached levels only seen in eight months over a span of three decades of data…”
Reuters: “J.P. Morgan Chase posted profit and revenue that smashed through analysts’ expectations on a strong rebound in trading revenue… Bond trading revenue surged 86% to $3.4 billion…”
Bloomberg: “‘This is Insane’: Muni Yields at the Lowest Since Elvis was King.”
We’re witness to historic developments across global financial markets extending far beyond an equities melt-up. U.S. corporate Credit this week traded near the narrowest spreads (to Treasuries) since 2007. Popular Credit default swap (CDS) indices priced this week at pre-crisis lows – investment-grade and high yield. At 46 bps, Goldman Sachs (5-yr) CDS closed the week at the low since 2007. JPMorgan CDS fell five bps this week to 30.6 bps, the low going back to October 2007. A Leveraged Loans index closed Friday at a record high price. European fixed-income CDS ended the week at or near multi-year lows – investment-grade, high-yield and financial. And this week from Bloomberg: “U.S. High-Grade Market Devours Nearly $100 Billion in New Debt.” (more…)