{"id":45693,"date":"2019-04-28T09:13:39","date_gmt":"2019-04-28T14:13:39","guid":{"rendered":"https:\/\/olduvai.ca\/?p=45693"},"modified":"2019-04-28T09:14:10","modified_gmt":"2019-04-28T14:14:10","slug":"weekly-commentary-officially-on-periphery-contagion-watch","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=45693","title":{"rendered":"Weekly Commentary: Officially on \u201cPeriphery\u201d Contagion Watch"},"content":{"rendered":"\n

Weekly Commentary: Officially on \u201cPeriphery\u201d Contagion Watch<\/a><\/h3>\n\n\n\n

This week saw all-time highs in the S&P500, the Nasdaq Composite, the Nasdaq100, and the Philadelphia Semiconductor Index. Microsoft’s market capitalization reached $1 TN for the first time. First quarter GDP was reported at a stronger-than-expected 3.2% pace.  <\/p>\n\n\n\n

So why would the market this week increase the probability of a rate cut by the December 11th FOMC meeting to 66.6% from last week\u2019s 44.6%? What\u2019s behind the 10 bps drop in two-year yields to 2.28%? And the eight bps decline in five-year Treasury yields to a one-month low 2.29% (10-yr yields down 6bps to 2.50%)? In Europe, German bund yields declined five bps back into negative territory (-0.02%). Spain\u2019s 10-year yields declined five bps to 1.02% (low since 2016), and Portugal\u2019s yields fell four bps to an all-time low 1.13%. French yields were down to 0.35%. Why would markets be pricing in another round of ECB QE?<\/p>\n\n\n\n

In the currencies, king dollar gained 0.6%, trading above 98 for the first time in almost two-years. The Japanese yen outperformed even the dollar, adding 0.3%.  <\/p>\n\n\n\n

April 22 \u2013 Financial Times (Hudson Lockett and Yizhen Jia): \u201cChinese stocks fell on Monday amid concerns that Beijing may renew a campaign against shadow banking that contributed to a heavy sell-off across the market last year. Analysts pinned much of the blame\u2026 on a statement issued late on Friday following a politburo meeting chaired by President Xi Jinping in Beijing. They were particularly alarmed by a term that surfaced in state media reports of the meeting of top Communist party leaders: \u2018deleveraging\u2019. That word set off alarm bells among investors still hurting from Beijing\u2019s campaign against leverage in the country\u2019s financial system last year. Those reforms focused largely on so-called shadow banking, which before the clampdown saw lenders channel huge sums of money to fund managers who then invested it in stocks.\u201d<\/p>\n\n\n\n

\u00a0\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

Weekly Commentary: Officially on \u201cPeriphery\u201d Contagion Watch This week saw all-time highs in the S&P500, the Nasdaq Composite, the Nasdaq100, and the Philadelphia Semiconductor Index. Microsoft’s market capitalization reached $1 TN for the first time. First quarter GDP was reported at a stronger-than-expected 3.2% pace.   So why would the market this week increase the probability […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[3186,7756,1849,661,3650],"class_list":["post-45693","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bond-yields","tag-credit-bubble-bulletin","tag-financial-markets","tag-qe","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45693","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=45693"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45693\/revisions"}],"predecessor-version":[{"id":45694,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45693\/revisions\/45694"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=45693"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=45693"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=45693"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}