Connect with us

Economics

Risk-Off Sentiment Hit Most Markets Last Week

US bonds edged higher for the trading week through Friday, Nov. 19, but red ink took a toll on the rest of the major asset classes, based on a set of ETFs….

Published

on

This article was originally published by The Capital Spectator

US bonds edged higher for the trading week through Friday, Nov. 19, but red ink took a toll on the rest of the major asset classes, based on a set of ETFs.

Vanguard Total US Bond Market (BND) bucked the selling and edged up 0.1% last week. Despite the gain, the fund still looks caught in a trading range (with a slight downside bias) as the market continues to process the conflicting signals for inflation, interest rates and the economy, which may be vulnerable this winter amid a rebound in the coronavirus cases.

By some accounts, however, favoring stocks is still warranted, if only because the possibilities elsewhere look worse, says a prominent market pundit.

“I am still pretty fully invested [in stocks] because, you know, there is no alternative,” Wharton professor Jeremy Siegel tells CNBC. “Bonds are getting, in my opinion, worse and worse. Cash is disappearing at the rate of inflation which is over 6%, and I think is going higher.”

Harvard University professor Larry Summers also sees elevated risk in pricing pressure, advising that “the odds have gotten a bit more tilted to the bad outcomes and a bit more tilted to inflation than I thought.” He explained on Bloomberg TV on Friday: “I say that because the inflation rates are up, I say that because markets have become more vulnerable and I say that because the Fed’s further behind the curve than I thought it was.”

The rest of the major asset classes posted losses last week, ranging from a mild dip in US inflation-indexed Treasuries (TIP) to a hefty 2.0% weekly decline in emerging markets stocks (VWO).

“The situation in emerging markets is just not very positive right now, given the combination of less-than-stellar growth and inflationary pressures,” says Salman Baig, portfolio manager at Unigestion.

Widespread losses last week took a bite out of the Global Market Index (GMI.F) — an unmanaged benchmark (maintained by CapitalSpectator.com) that holds all the major asset classes (except cash) in market-value weights via ETF proxies. GMI dropped 0.4%, the second straight weekly loss.

Profiling the major asset classes through a one-year-performance lens continues to show an upside bias, although red ink is starting to creep into the picture.

US real estate investment trusts (REITs) and US stocks are currently neck and neck for leading one-year results with roughly 33% gains each.

Meanwhile, four slices of the bond world are posting one-year losses through last week’s close. The biggest decline: fixed income in government bonds in emerging markets: VanEck Vectors J.P. Morgan EM Local Currency Bond ETF (EMLC), which shed 6.4% as of Friday’s close vs. the year-earlier level (including distributions).

GMI.F is up 19.3% for the trailing one-year window.

Monitoring asset classes via drawdown shows that US assets are posting the smallest peak-to-trough declines, led by iShares TIPS Bond ETF (TIP), which has a fractional drawdown of just -0.4%.

GMI.F’s current drawdown is a mild -0.9%.


Learn To Use R For Portfolio Analysis
Quantitative Investment Portfolio Analytics In R:
An Introduction To R For Modeling Portfolio Risk and Return

By James Picerno






Author: James Picerno

Economics

Inflation Never Mattered Much For Crypto… Until About A Year Ago

Inflation Never Mattered Much For Crypto… Until About A Year Ago

Inflation never mattered much for crypto… until about a year ago.

As…

Inflation Never Mattered Much For Crypto… Until About A Year Ago

Inflation never mattered much for crypto… until about a year ago.

As UBS notes in its latest Crypto Keys note last week, forward-looking measures of US consumer prices today rank among the most prominent correlations for digital assets…

…. something we first pointed out a month ago.

Sensitivity to actual data prints is also mounting accordingly…

… and as UBS notes, BTC, ETH and a range of more established tokens screen statistically on par with traditional instruments that are considered classic inflation winners or losers.

Co-movement is weaker for newer coins like BNB as well as ADA, SOL, DOT and AVAX, which have strongly outperformed in 2021, along with meme plays like DOGE. But to UBS that seems encouraging rather than surprising when idiosyncratic factors have clearly been driving their price action.

But while inflation clearly has be driving the top cryptocurrencies in the past year, the risk now according to UBS is that more powerful drivers will emerge to dislodge the status quo. Potential candidates could be things like stablecoin regulation, tighter exchange and account registration requirements reducing activity in CeFi and DeFi, and new restrictions on bank participation, all of which could be near-term negatives affecting market liquidity and activity but longer-term positives paving the way for institutional participation. While such things may sound crypto-specific, they mirror conditions that govern how conventional inflation hedging instruments behave. 

Tyler Durden
Sun, 11/28/2021 – 19:00

Author: Tyler Durden

Continue Reading

Economics

Hillary: “Americans Just Don’t Appreciate What Joe Has Done For Them”

Hillary: "Americans Just Don’t Appreciate What Joe Has Done For Them"

Via 21stCenturyWire.com,

This might be the longest-ever Thanksgiving…

Hillary: “Americans Just Don’t Appreciate What Joe Has Done For Them”

Via 21stCenturyWire.com,

This might be the longest-ever Thanksgiving weekend for Joe Biden. While he’s been enjoying a warm blanket and a hot cup of Ovaltine with his family in Nantucket, the President’s poll numbers have been in virtual free-fall. It seems that the nation is fast losing confidence in his ability to handle important issues like the economy, the border, foreign policy and crime running wild on America’s streets. In short, the majority of Americans, both Democrat and Republican, do not believe Joe is capable of fulfilling his duties as the chief executive of the world’s premier superpower.

At present, Biden’s average job approval rating stands at around 40%, a steep drop from the 55% percent average approval rating he enjoyed last May.

No one really knows just how low Joe will go.

Still, this hasn’t stopped his ardent allies from rushing to his defense, and blaming his flagging numbers on social media trolls (see deplorables).

Carlos Garcia from The Blaze writes…

Former presidential candidate Hillary Clinton tried to explain away President Joe Biden’s poor polling by accusing Americans of not appreciating what Biden has done for them, and blamed social media.

Clinton made the comments while a guest on Rachel Maddow’s MSNBC show Tuesday evening.

“You know, democracy is messy. You know, a lot of people got, oh I think, kind of frustrated looking at the messy process of legislation,” said Clinton.

“And they didn’t really appreciate that, within a year, the Biden administration has passed two major pieces of legislation through both the House and the Senate, they passed another major piece through the House that will be soon be in the Senate,” she continued.

“By any measure those are extraordinary accomplishments and they really will help many millions of Americans with healthcare and prescription drug prices, as well as climate change and so much else,” said Clinton.

“But because of the way we are getting our information today,” she concluded, “and because of the lack of gatekeepers and people who have a historic perspective who can help us understand what we are seeing, there is a real vulnerability in the electorate to the kind of demagoguery and disinformation that, unfortunately, the other side is really good at exploiting.”

Both Maddow and Clinton accused Republicans of undermining the results of fair elections and calling for violence as a political solution in the interview.

Biden’s poll numbers have suffered greatly after a cascade of damaging incidents plaguing his administration. Among the worst were the disastrous retreat from Afghanistan, the painful cost of high inflation, and the crisis of illegal immigration at the border.

One poll from October found that only 38% of Americans thought Biden deserved a positive job rating.

Watch Hillary’s clip here: 

Tyler Durden
Sun, 11/28/2021 – 17:30

Author: Tyler Durden

Continue Reading

Economics

Silver price under pressure despite the risk-off sentiment

Silver price extended the week’s losses in Friday’s session despite the risk-off market sentiment. In the coming week, focus will be on Fed policymakers’…

Silver price extended the week’s losses in Friday’s session despite the risk-off market sentiment. In the coming week, focus will be on Fed policymakers’ remarks and data related to its industrial and precious metal status.

Market mood

The fear & greed index shifted from a greed level of 64 to the fear end of the spectrum. On Friday, the index’s reading was at 31. Both the market volatility and safe-haven demand are exhibiting extreme fear. Usually, risk aversion boosts precious metals based on their safe-haven status.

However, a strengthening US dollar is exerting pressure on silver price. Concerns over the new wave of COVID-19, coupled with positive economic data from the US, boosted the dollar index to its highest level since July 2020. Besides, slowed growth of the Chinese economy has raised concerns over silver’s industrial demand.

In the new week, silver price will be reacting to manufacturing PMI from China and other economies. Besides, investors will be keen on Jerome Powell’s testimony as well as speeches from various Fed policymakers. The speeches come a few days after Fed meeting minutes that exuded a hawkish tone. The nonfarm payrolls data scheduled for Friday will further influence the metal’s price movements.

Silver price technical outlook

Silver price has been under pressure over the past week. The week’s losses defined a trend reversal after the precious metal hit a four-month high in the previous week. Since Monday, it has dropped by about 6.89%.

The precious metal ended the week at 23.17; down by 1.83%. On a four-hour chart, it is trading below the 25 and 50-day exponential moving averages. Besides, with an RSI of 26, it is in the overbought territory.

In the coming week, I expect silver price to remain under pressure amid the strengthening US dollar. However, it may begin the week on a corrective rebound as it finds support along the psychological level of 23.00.

It may bounce back to find resistance along the 25-day EMA at 23.72. Subsequently, it may trade within the formed horizontal channel with 23.16 and 23.72 as the lower and upper borders respectively. Above the aforementioned resistance level, the bulls will be eyeing the 50-day EMA at 24.03. On the flip side, a move below Friday’s low of 22.94 will likely place the support zone at 22.35.

silver price
silver price

The post Silver price under pressure despite the risk-off sentiment appeared first on Invezz.





Author: Faith Maina

Continue Reading

Trending