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April 18, 2019

Is bond market liquidity a problem?

A common misconception among investors is that a lack of liquidity is regularly the root cause of market corrections. Instead, investors should view liquidity as an amplifier that intensifies an original catalyst, rather than as the catalyst itself.

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Recent posts

April 12, 2019

What will it take for manufacturing to rebound?

Over the past few quarters, there has been a notable deterioration in the distribution of global growth, with the services sector continuing to look relatively healthy but the manufacturing sector coming under a great deal of pressure.

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April 5, 2019

Why are bond yields going negative again?

In 2019, the share of global government bonds trading with a negative yield has risen to 29%, its highest level since October 2016. Negative yielding debt is a strange phenomenon; buying a bond with a negative yield means that investors are willing to pay, in this case, governments to keep their money safe.

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March 29, 2019

Why is energy sector spending slowing?

Please change the description to the following: After a strong 2017, it appears that investment spending in the U.S. energy sector may have slowed down. Recently released data indicates that energy sector capital expenditures (“capex”) decelerated in 2018, finishing at a level only modestly higher than 15 years ago.

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March 26, 2019

3 things to know about the inverted yield curve

Last week a closely watched economic indicator, the yield difference between the 3-month T-bill and the U.S 10-year inverted. Why does this matter? Normally a yield curve is upwards sloping as long-dated bonds are inherently more risky than short-dated bonds due to the risks associated with time.

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March 22, 2019

Where can I find income with the Fed on hold?

As expected, the Federal Open Market Committee (FOMC) left interest rates unchanged at the March meeting. More importantly, however, they adjusted their forecasts to now show no interest rates hikes in 2019, one in 2020, and none in 2021. Interest rates moved lower in light of this new information, leaving investors facing the same issue of where to find income in an environment of historically low real and nominal yields.

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March 15, 2019

If the global economy is slowing, why are risk assets up this year?

The phrase of the day has moved away from 2017’s “synchronized global growth” to the less cheerful “global slowdown”. Indeed, global GDP growth has moved down from 3.8% in mid-2017 to 2.6% at the end of 2018. The Markit global manufacturing PMI survey moved a bit lower still in February to 50.6, the lowest level since June 2016 and a sign that slower growth is still in the cards this quarter.

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