Discover and read the best of Twitter Threads about #bonds

Most recents (24)

Have US Treasury yields finally peaked? 🧵 1/x

#TLT $TLT #bonds #Fed #recession #StockMarket #investing #trading #inflation
They may have, but there are still significant risks. The market has been driving yields lower by pricing in a Fed pivot, NOT recession. First, why is the market pricing in a Fed pivot? 2/x
Last week there was a miss in the CPI inflation reading. Headline CPI fell from 8.2% to 7.7% and Core CPI fell from 6.6% to 6.3%. The market interpreted this as further evidence that Dec will be the Fed's last rate hike and a pause/pivot is near, allowing for a soft landing 3/x ImageImage
Read 18 tweets
Updated Inflation, rates outlook & prospects for #bonds and #stocks:

We're moving into a new phase of disinflation from here. This is what I expect to see unfold: Update 🧵:

#macro $SPY $QQQ #inflation
Back in early August I wrote that we were about to experience a surge in core inflation into end Q3.

At the time #stocks had rallied strongly and this presaged another pullback given it meant the #Fed had to be more hawkish.

I was a touch early w/ mths:
This played out and I've posted my multi-factor inflation model for US CPI previously. It shows #inflation moderating quickly in mid 2023:

Fair to say this generates skepticism. The narrative is once CPI >5% it stays there for > 2 years. Well where to now? Image
Read 13 tweets
THREAD: A picture is worth a thousand words. Let's look at a few of the globe's largest #ETF's & their graphs & see if we can make some sense of the current market environment.

What a year it's been for #Oil & #Energy! Only positive YTD #MSCI #Sector.

$IXC
2/19

#Global #CleanEnergy #ETF relative to Global #Energy shows an interesting picture.

$ICLN vs $IXC
3/19

#EmergingMarkets #ETF seriously lagging #DevelopedMarkets ETF, mostly due to disinvestment from #China.

#SouthAfrica might be down over 1YR, but $EZA performance in USD (-15.9%) is still way ahead of both $URTH (DM -22.2%) & $EEM (EM -28.9%) over the same period.
Read 19 tweets
FT opinion article: “The energy crisis gives the US a chance to woo big European companies”. If cheap natural gas can’t come to Europe, Europe will have to go the cheap natural gas. Thread #markets #equities #bonds #energy #ESG ft.com/content/0a78d7…
1/According to the author European heavy industry has endured a grim few months. Although the fuel crisis appears to be easing and companies invest in green energy/efficiency some are also rethinking their geographic footprint.
2/The US now has an opportunity to woo European multinationals, with energy costs clearly playing a role in new investments. US has an advantage over Europe because natural gas supplies are local, reliable and consistently cheaper.
Read 7 tweets
🧵 Is the American Dream dead? - a tweetstorm

This is a brain dump of .@RaoulGMI's 30+ years of knowledge, how the world works, and how his macro framework fits into it all ⤵️
1/ There's no denying that we're in a mess!

By the Law of Unintended Consequences, every time we try to fix A, we create problems B, C, D, E, etc.

We hardly understand these new problems unless there's hindsight to connect the dots...
2/ [PART I: #HISTORY]

So, how the hell did we get here?

Let's start by looking at the peak of the #British Empire:

It was the world's largest realm. But as with every empire, trying to control so many people across the globe has its price & #debt weakened its structure...
Read 81 tweets
Wątek 🧵
Kto liczy na poważniejszy rajd na rynkach akcji, powinien z uwagą obserwować rentowności obligacji #bonds #yield rządowych, zwłaszcza amerykańskich. Przy czym najczulsze na zmiany powinny być te o dłuższej zapadalności (10 i więcej lat) /1 ImageImageImage
Od paru miesięcy rentowność obligacji jest w centrum zainteresowania Dużych. Z tego obszaru płyną kiepskie sygnały: oprócz słynnych już problemów GB z "małym budżetem" w którym dziurę miała wypełnić emisja obligacji, także Niemcy mieli niedawno problem: próbowali /2
wrócić na rynek z 7 letnimi Bundami. Okazało się, że znaleźli nabywców na zaledwie ok. połowę emisji. W USA Sekretarz Skarbu, Jannet Yellen zaapelowała do banków, by "dostarczyły trochę płynności" rynkowi Treasuries (czytaj: kupowały więcej obligacji). Czyli sprawa zaczyna /3
Read 11 tweets
PART 2 of 2 - Bond crash implications for stocks:

Why does the #bonds crash signal further pressure for #stocks?
(& why do rate hikes take so long to show in earnings?)

Here I deal with general corporates, consumer & the banks:
$SPY $QQQ #macro
CORPORATES:

As cost of capital rises, the direct impact on corporate earnings starts small then builds. The direct impact of higher rates on corporate borrowings can be estimated to be only approx -2-3% on EPS extra each year due to termed out debt at past low rates. But
about 20% of debt gets refi’d each yr so this builds to a more material headwind over 12-24 mths.

WORKING CAPITAL EFFECTS

Working capital terms start to get tightened by companies as rates rise. Due to WC debt costs (mainly floating rates), companies are forced to offer
Read 21 tweets
Why does the #bonds crash signal further pressure for #stocks?
(& why do rate hikes take so long to show in earnings?)

High inflation & rate hikes transmit through the economy with a range of 1st to 3rd order effects with varying lags. Lets map those out:

PART 1 of 2 threads:
This is complicated to map given various dynamics, sectors & lags, particularly with 280 char limits! But lets give it a go anyway. This is descriptive to help you think through aspects & trades you may not have yet considered

Theres 2 PARTS to this thread due to length
Direct impacts:

When rates are hiked in response to #CPI, theres 2 1st order effects that are fairly contemporaneous. First #bond prices fall as they are the direct inverse of their rate. Higher Fed Funds, higher rates across the curve, lower bond prices
h/t @leadlagreport chart
Read 18 tweets
#Duration works both ways!
#Austria's '100-year' bond, maturing in 2120, with a duration of 46 years, is down a whopping 72% since late 2020 when global yields bottomed.
short thread 1/9
This also answers the many questions about why the value of (UK) #liability-driven investment funds, used by pension funds to match the #duration of their #liabilities, has plummeted. 2/9
Theoretically, since pension fund #liabilities and #assets both drop when #yields rise - it is not called liability matching for nothing - there shouldn't be a problem, right? 3/9
Read 9 tweets
1/17 En este hilo vamos a repasar la tesis de la #plata #silver y pensar porque podria ser unas #inversiones a tener en cuenta. Sobretodo porque puede ser una opción mas interesante que el #gold si pensamos en #preciousmetals 🧵
2/17 El #bear case esta soportado por un #dolar fuerte y unos #bonds yields altos gracias a las subidas de tipo de la #FED, ya que esta a dejado claro que va a subir tipos en noviembre y diciembre y mantenerlos en 2023 Image
3/17 Por otro lado, el #dolar hará peak pronto porque no puede si esta muy fuerte destruirá demanda ya que la mayoria de #commodities se compran en dolares Image
Read 17 tweets
#PCE #Core #Inflation keeps rising.

Main indicator for the #FederalReserve when judging whether or not to continue raising #interestrates.

#Powell was quite clear in his speeches that they will continue raising "into pain" as long as price stability is not achieved.

🧵
By "into pain", they are primarily referring to their dual mandate of price stability (#inflation) and maximum #Employment.

But there is not much pain showing up in the job market.

Last weekly jobless claims hit a 5-month low.

reuters.com/markets/us/us-…
So to summarize, #TheFed has 2 jobs:
1. Reduce #inflation (not done)
2. Maximize #employment (done)

And they've been adamant about raising #rates until 1. is done, even at temporary setbacks to 2.

Unless they plan on pulling a #BoE, anything short of #75bps/#100bps is hopium.
Read 4 tweets
Thanks to @GeoffCutmore & @cnbcKaren for this morning's chat on #SquawkBox.

I did TRY to find something positive to say - honest, folks!

Following are the notes I sent the team before the show:-
🧵1/x
Ok. So here goes...

2/x
Something I've mentioned on here: the enormous scale of Europe's energy problem runs into the €trillions. The #AmpelDesGrauens "Doppel-Wums" -'bazooka' - relief package is €200bln & doubts are *already* being voiced whether will suffice.
3/x
Read 14 tweets
Did someone warn you of the current #inflation, #recession, and #bearmarket in equities? Did you get out or reallocate in time? Breaking even? Maybe even profit?
Did you pay a subscription for those warnings late last year?
I started warning friends about it in 2016.

Read on🧵
When I said that I was warning my friends about it in 2016, I did so because it was clear that #Trump would not be a good president for the US & world #economy long-term, and would increase the odds of #inflation and rising #interestrates.

Late 2016 DMs in Norwegian to a friend: Image
But why am I not linking Twitter screenshots? Well, I haven't been on here for even two years yet, so my oldest conversations are in private FB chats with friends and family, as those were the only people I tried to warn.

2018 chats about #Euribor annual hedging puts re #ECB: Image
Read 19 tweets
DoubleLine CEO Jeffrey Gundlach presents "Rehab."

Tune in Thursday, 9/15/2022 at 1:15 pm PT | 4:15 pm ET.

#macro #markets #commodities #Fed #inflation #growth #rates #stocks #bonds #EM #Europe #USD #FOMC #Powell #recession Image
.@DLineCap CEO Jeffrey Gundlach: I think the U.S. needs to go into rehab
Gundlach: There are 1,250 IRS agents who are not paying taxes. 87,00 new IRS agents coming.
Read 65 tweets
#YouAskedUs if we printed cash to finance the federal gov’t.

We didn't.

👇 Keep reading to learn how we supported the economy from the shock of the pandemic. #CdnEcon #AskTheBoC

1/6
The pandemic has been a crisis like no other.

As a result, we took various measures, like buying bonds, to support and ensure a strong and stable #economy.

2/6
We bought existing gov't bonds from banks on the open market.

Why?

This helped unblock frozen markets at the start of the #pandemic.

It let households, companies and governments access funding when they really needed it.

3/6
Read 6 tweets
🎉🏆 GIANT LEAP TOWARDS NEXT-LEVEL DEFI 🏆🎉

@ethereum APPROVED OUR ERC-3475 STANDARD ✅

You can now fully customise your #blockchain #bond & we made them tradable!

Gateway to new possibilities in #DeFi:
bit.ly/3PMHs2Y

Let’s see what #DeBond’s tech can do!
🤓🧵⬇️
EIP-3475 is a new standard #smartcontract interface created by #DebondProtocol

eips.ethereum.org/EIPS/eip-3475

It’s an interface for #tokenized obligations with abstract on-chain metadata storage

@VitalikButerin
@dabit3
@PatrickAlphaC
@cz_binance
@saylor
Callable #bonds are now possible!

Store more bond information, customise them — just like in the traditional finance

But now, fully on #blockchain

A whole new world market of market opportunities
🌍📈🚀

@a16z
@AlamedaTrabucco
@TimDraper
@polychaincap
@tradeparadigm
Read 7 tweets
In Financial markets, Exit strategy is least talked about topic but plays very important role in generating Alpha, here is a thread covering the 15 point strategy on the same with 2022 case study. Retweet for wider reach & get rewarded #StockMarket #cryptocurrency #Markets (1/n)
Equity markets goes through Greed & Fear cycle and pendulum tends to swing to the extreme with Overvaluation/ exuberance in Bull market peak and Undervaluation/ panic in Bear market #StockMarketindia #DowJones #SmallCaps (2/n)
It is very important to stay unbiased, calm and take rationale decision in all the situations. The rationale decision can be change in investing style/ strategy to conservative ( during bull market peak) or aggressive during bear marker bottom #StockMarket #cryptocurrency (3/n)
Read 16 tweets
🚨FOMC preview ...🧵

Target rate probabilities for July 27 (Wed) between 225 and 275 with 3x as much probability on 225-250 (75 bps).

#rates #bonds #federalreserve #us #UnitedStates #fed #macroeconomics #EconTwitter #tightening #riskoff #stocks #riskassets #CentralBanks
Fed will be data driven.

Currently, the market is factoring in target rate probabilities (Dec 2022 FOMC meeting) at 325-375 bps.

#rates #bonds #federalreserve #us #UnitedStates #fed #macroeconomics #EconTwitter #FOMC #tightening #riskoff #stocks #riskassets #CentralBanks
📉Desired demand reduction is visible.

Consumer confidence and subsequently, Retail is taking a massive beating.

JP Morgan global aggregates. 👇

#rates #bonds #federalreserve #us #UnitedStates #fed #macroeconomics #EconTwitter #FOMC #tightening #riskoff #stocks #riskassets
Read 4 tweets
🚨 Check out this @TwitterSpaces on credit insights hosted by @profplum99 (Mike Green) with @Volatilysmile
👇🏽

Esp timely with iTraxx hitting 2 day tightening next to Covid levels when Fed started Corporate Asset purchase peogram.

#credit #swaps #bonds #defaults #CDS
🔥 iTraxx ramp

Real possibility of idiosyncratic risk for specific cos exposed to specific factors 👇

#credit #swaps #bonds #defaults #CDS #leveredloans #hedgefunds #pods #creditfunds
I received bunch of DMs about iTraxx.

For understanding the same, please check out this link:

ihsmarkit.com/products/marki…

iTraxx indices are a family of European, Asian and emerging market tradable credit default swap indices.

#credit #swaps #bonds #defaults #CDS #leveredloans
Read 8 tweets
"Russia defaulted on its foreign debt for the first time since 1918, pushed into delinquency not for lack of money but because of punishing Western sanctions over its invasion of Ukraine."

wsj.com/articles/sanct…
1/ "Russia missed payments on two foreign-currency #bonds as of late Sunday, according to holders of the bonds. The day marks the expiration of a 30-day grace period since the country was due to pay the equivalent of $100 million in dollars and euros to #bondholders."
2/ "Russia last failed to pay its foreign borrowing during the #BolshevikRevolution when #VladimirLenin, the newly installed communist leader, repudiated the debt of the Russian Empire."
Read 6 tweets
📢THE COLLAPSE OF THE WORLD ECONOMY AND THE SOLUTION IN THE FORM OF CRYPTO! 📢

In this little story I summarize how Covid, Supply Chain, Debt, Wages, Inflation, a Eecession, Insolvency and an aging population come together to form a common solution: Crypto Assets

1) ...
So much is happening in the world. War, High #inflation, Covid, #recession, insolvancy, a debt bubble and Supply Chain problems.

All of these causes have a large impact on the world economy and therefore on your portfolio, which makes it important to understand what is going on. Image
The main consequence:

An nation on the verge of collapse and a debt bubble around the world.

As Ray Dalio said

'A nation in its last effort of strength is hugely in debt, there are internal wealth disparities and printing money seems to many to be the solution, but it is not'. Image
Read 25 tweets
The United States Treasury Bonds were considered the safest bonds in the whole world all these years. Investors and governments always preferred to park their money buying these bonds. Why?
The Fed was able to keep the real interest rates of these bonds (inflation-adjusted) above zero.

Until,
Now, The world finally lost trust in these bonds. The Fed lost control over its economy. On 15th March 2021, the real interest rates dropped well below zero and are now at -5.4 %. It means whoever bought US treasury bonds will carry a negative real interest rate.
Read 5 tweets
Mutual Funds - The Future of Investing

A decade of pension fund growth in Nigeria has prepared the ground for a boom in the country’s mutual fund sector.

Investments in carefully constructed higher performing risk-managed funds now outperform interest on bank deposits and... Image
...even land.

In 2020 alone, for example, assets under management in Nigeria’s Mutual Funds grew by 50% - topping N1.6 trillion.

Mutual funds are investment funds that pool money from many investors to purchase securities, like stocks, bonds, money market instruments,....
....and other assets.

Mutual funds are operated by professional money managers who seek to assemble the right mix of funds, balancing risk with growth according to investors’ risk appetite, growth needs and investment horizons.

It is in the management of these funds that...
Read 4 tweets

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