- Chart of Global Government Bond yields.
- 25% have a negative yield … almost none yield more than 3%.
Macroeconomics
Snippets on the big picture.
M&A
- Interesting to see M&A in the US is back to peaks.
- Not so much in Europe, Japan or China.
- Source: IMF Global Financial Stability Report.
UK Election Polls
- Updated opinion polls in light of events this evening.
- Source: Wikipedia.
Cross-Correlations
- Chart showing the cross-correlation of asset classes from Fidelity.
- h/t: 361 Capital.
Dividend Yield
- 1,100 companies in the MSCI World Index yield more than +300bps above global government bonds (source BofA Merrill Lynch).
PMI Heat Map
- Interesting to see how related the cyclicality of the world is.
Central Bank Balance Sheets
- Central bank Balance sheets are back to growth according to Merrill Lynch.
- This is after 2 years of being flat.
- This is seen as a bullish sign.
- h/t Isabelnet
Yield Curves
- Typically the S&P 500 peaks 10 months after the yield curve inverts.
- h/t Isabelnet
Oaktree Latest
- Latest memo from Howard Marks of Oaktree who we mentioned here.
- It explores the implications of negative interest rates and is an informative and very intuitive read, as always.
Central Bank as Debt Holders
- Great chart showing the current level of sovereign debt held by central banks across different countries (as % of GDP).
- From 2008 (dark blue) until 2018 (orange diamond) and …
- … how we got there (lighter blue lines show changes).
- h/t ScopeRatings
Consumer vs. Industrial
- Consumer confidence relative to business confidence (ISM) is at extreme levels (almost 2 std. deviations).
- h/t 361 Capital, BAML.
Wage Growth
- Wage growth for low-income workers is growing a lot stronger than the rest of the wage distribution.
- This trend has really accelerated in 2019.
Central Banks buying Gold
Yield Curve and Recessions
- Yield curves are excellent predictors of recessions.
- You can also have recessions without inversion.
S&P Valuations
- Valuation measures of the S&P index don’t look excessive.
- This seems to be the case no matter how you cut it.
- A good set up for a potential monetary policy driven rally into strong seasonality – especially with the ISM on its back already.
- h/t The Brooklyn Investor.
Industrial Recession
- Fedex is an early cyclical while TPG have their fingers in a lot of pies.
- “The industrial sector remains sluggish due to an inventory build-up and increased geopolitical trade tensions…US manufacturing PMI has been very weak this year. Given that our industrial production outlook is down 70 basis points from June currently at 0.9%.” Fedex CEO.
- “Certainly growth has slowed globally not going negative in terms of recessionary worries but we’re not seeing the sort of optimism and forward leaning behavior that we saw in our CEOs just a few years ago” – TPG Capital Co-CEO James Coulter, 23rd Sep, CNBC
- h/t The Transcript
Immigration Economics
- Ever find yourself in an argument about immigration.
- This great article lays out, in considerable detail and with supporting evidence, the economic effects of immigration.
Help to Buy
- It took the government 30 pages to come to the conclusion that was obvious from the start of the program.
- “Help to Buy was originally intended as a short-lived scheme but will now last for 10 years and consume over 8 times its original budget, yet the value achieved from its extension is uncertain.”
- “Around three-fifths of buyers who took part in the scheme did not need its support to buy a property, and the large sums of money tied up could have been spent in different ways to address a wider set of housing priorities and focus more on those most in need.”
Iran vs. Saudi
- Sabres are once again rattling in the Middle East.
- We are reminded of an excellent piece comparing the current situation to that of the 30 years war in Europe.
- Historical analogies have limitations but can be useful.
- After all, “History doesn’t repeat but it often rhymes” Mark Twain.
Boris
- YouGov latest paradoxically finds that despite the difficulties faced by the prime minister since taking office his popularity has grown.
