New York Times (April 21)
“President Trump’s trade war has completely upended investment flows, with global investors selling off U.S. stocks and corporate and government bonds at a clip unlike anything Wall Street has seen in recent years.” Though some semblance of “calm returned to the corporate and government bond markets late last week,” analysts are still wary of “Trump’s next moves, fearing that his protectionist policies and threats against federal institutions could re-accelerate money flows out of the United States, hitting the dollar especially hard.”
Tags: Analysts, Bonds, Calm, Corporate, Global investors, Institutions, Investment flows, Markets, Money flows, Protectionist, Stocks, Threats, Trade war, Treasuries, Trump, U.S., Upended, Wall Street
Wall Street Journal (April 14)
“The biggest issue in financial markets these days, other than tariffs, is the fate of U.S. dollar assets. Are President Trump’s herky-jerky decision-making and border taxes causing the world’s investors to shy away from the dollar and U.S. Treasurys?” Amid the volatility, that remains to be seen, but any shift would occur “’at the margin’ because the U.S. remains too big a market, and its financial system too liquid, to ignore.” Still, the potential impact should not be dismissed lightly. “Even a modest shift from Treasury bonds” could have enormous repercussions.
Tags: Bonds, Decision-making, Dollar assets, https://www.wsj.com/opinion/is-there-a-new-trump-risk-premium-tariffs-trade-policy-bonds-us-dollar-investing-9bee401d?mod=hp_opin_pos_4#cxrecs_s Financial markets, Impact, Investors, Jerky, Liquid, Margin, Shift, Tariffs, Taxes, Treasurys, Trump, U.S., Volatility
The Economist (April 10)
“For a good few hours on April 9th, disaster beckoned. Share prices had been falling for weeks. Then the market for American Treasury bonds—normally among the safest assets available—started convulsing, too. The yield on ten-year Treasuries leapt to 4.5%…. That meant bond prices, which move inversely to yields, had cratered. The failure of both risky and supposedly safe assets at once threatened to destabilise the financial system itself.”
Tags: April 9, Bonds, Convulsing, Cratered, Destabilise, Disaster, Failure, Financial system, Market, Risky, Safe assets, Share prices, Threatened, Treasuries, U.S., Yield
Inc. (January 9)
“Everyone loves talking about the stock market, but the $28 trillion Treasury market is the fortuneteller of the pair—bonds are now flashing warnings of a Fed policy error, resurgent price pressures, and a ballooning debt pile.” Contrary to expectations, “bond yields have surged since the Fed began cutting interest rates.”
Tags: Ballooning debt, Bonds, Fed, Fortuneteller, Interest rates, Policy error, Price pressures, Stock market, Treasury market, Warnings, Yields
Reuters (January 2)
Jane Street and Citadel Securities looked primed to seize “a much bigger slice of the $150 billion global-markets pie,” disrupting incumbent trading giants like JPMorgan, Morgan Stanley, Bank of America and Deutsche Bank “who in 2025 will notice electronic market-makers acting more like banks.” Until now, there’s been a “seemingly happy co-existence” with the electronic market makers focused on flow, but that “will end in 2025” when “the upstarts” flex their greatly expanded capital base to make “a fresh assault on bond and commodity trading.”
Tags: $150 billion, Banks, BoA, Bonds, Capital base, Citadel Securities, Commodity trading, Deutsche Bank, Disrupting, Electronic market-makers, Global markets, Incumbent, Jane Street, JPMorgan, Morgan Stanley, Trading giants
Bloomberg (March 28)
“The risks are piling up for Japan’s currency, stocks and bonds as the nation’s fiscal year draws to an end right when many global markets close for Easter — and less than two weeks after the central bank hiked interest rates.”
Tags: Bonds, Central bank, Currency, Easter, Fiscal year, Global markets, Interest rates, Japan, Piling up, Risks, Stocks
Wall Street Journal (December 28)
“The failure to anticipate how quickly the Fed would raise interest rates has upended banks big and small this year. Three bigger ones collapsed this spring, but it is community banks… that have been in a full-blown crisis. The losses on long-term bonds have unnerved depositors, investors and regulators who have questioned how bankers failed to properly protect themselves from interest-rate risks.”
Tags: Anticipate, Banks, Bonds, Collapsed, Community banks, Crisis, Depositors, Failure, Fed, Interest rates, Investors, Protect, Regulators, Risks, Unnerved, Upended
Financial Times (December 16)
“European bonds rallied on Friday, pushing yields to nine-month lows as investors focused on the latest signs of a slowing economy and shrugged off the European Central Bank’s insistence that it was not considering interest rate cuts.” Given the Fed’s pivot, markets appear skeptical of “ECB president Christine Lagarde’s insistence on Thursday that it was too soon to talk about the timing of rate cuts and that the bank had ‘more work to be done’ in its battle to tame inflation.”
Tags: Bonds, ECB, European, Inflation, Insistence, Interest, Investors, Lagarde, Lows, Rallied, Rate cuts, Slowing Economy, Timing, Yields
Wall Street Journal (December 12)
“Investors spent most of 2023 fretting about inflation and interest rates. Now they are snapping up everything from stocks and bonds to crypto and even gold.” Does the “simultaneous surge across assets” signal “the arrival of a lasting bull market” or is it “just a fleeting sugar high at the end of the Federal Reserve’s tightening cycle?” Opinions are divided.
Tags: 2023, Bonds, Bull market, Crypto, Cycle, Fed, Fleeting, Fretting, Gold, Inflation, Interest rates, Investors, Stocks, Surge, Tightening
Bloomberg (December 1)
“For all the bullish milestones notched by November’s big market surge, recent history offers Wall Street a lesson in caution. Time and time again, speculation breaks out that the Federal Reserve is poised to ease monetary policy soon enough — spurring even cautious investors to erupt in a spasm of cross-asset buying. Stocks jump, bond yields fall, and a dash ensues among equity speculators into shady corners encompassing everything from meme fliers to crypto and profitless tech.”
Tags: Bonds, Bullish, Caution, Cautious, Cross-asset buying, Crypto, Fed, Investors, Market surge, Monetary policy, November, Speculation, Stocks, Tech, Wall Street, Yields
