US stocks tumbled for a third day after unexpectedly positive data underpinned Fed intentions to keep tightening. All three major indexes lost around 1%. Treasuries slumped, pushing 2-year yields up more than 3 bps to 3.46%, as swaps showed the odds of a 75-bp hike in September above 70%.
Bottom-line: 러프에서 공을 칠 때서야 핸디가 드러나는 법, 중앙은행의 금리인상 선회 기대로 편안한 상승을 즐겼다면, 이제는 다른 이야기에 귀를 기울여야 할 것임.
It’s easy to be an optimist when sailing is smooth. The real test comes when things get rough. That’s where true-believer bulls find themselves as momentum reverses in equity markets, with pro-stock arguments based on everything from valuations to financial conditions suddenly in question as Federal Reserve hawkishness revives. Early returns aren’t great. The S&P 500 is down 5% in three days. Worried investors are wondering the same thing: Is this the start of the real crash, or will the things that put a floor under the last one keep the new selloff from snowballing? Charts and valuation tables are being dusted off for guidance on whether the levels of mid-June in equities can hold as the low point of the 2022 market. “It really stems on what you thought the driver was of the rally. So if your belief that the rally was 100% predicated on a Fed pivot, then of course you think you’ll have to change gears and the market’s heading to new lows,” Art Hogan, chief market strategist at B. Riley, said in a phone call. “And if I believed the catalysts had nothing to do with the narrative around a pivot, then I feel convinced that we’ve seen the lows for the year.”
It’s easy to be an optimist when sailing is smooth. The real test comes when things get rough. That’s where true-believer bulls find themselves as momentum reverses in equity markets, with pro-stock arguments based on everything from valuations to financial conditions suddenly in question as Federal Reserve hawkishness revives. Early returns aren’t great. The S&P 500 is down 5% in three days. Worried investors are wondering the same thing: Is this the start of the real crash, or will the things that put a floor under the last one keep the new selloff from snowballing? Charts and valuation tables are being dusted off for guidance on whether the levels of mid-June in equities can hold as the low point of the 2022 market. “It really stems on what you thought the driver was of the rally. So if your belief that the rally was 100% predicated on a Fed pivot, then of course you think you’ll have to change gears and the market’s heading to new lows,” Art Hogan, chief market strategist at B. Riley, said in a phone call. “And if I believed the catalysts had nothing to do with the narrative around a pivot, then I feel convinced that we’ve seen the lows for the year.”
Bottom-line: 에너지 대란 속에서도 지멘스에 대한 강한 수요를 보면 회사채 시장에서 거래의 판단 기준이 다시 질적은 측면으로 이동했음을 알 수 있음. 이런 현상은 중앙은행의 강한 긴축 의지 확인 뒤 심화되었음.
Strong order books for Siemens’ bond issue -- despite the backdrop of a developing energy crisis -- show that the gravitational pull toward quality is becoming apparent again as credit’s summer rally rapidly loses steam. Europe’s corporate bonds have lost almost all of the summer gains as Fed Chair Jerome Powell made the case for a decisive fight against persistent inflation and markets brace for the possibility of a 75bps hike by the ECB next week. Against this backdrop, trades that proliferated during the first half’s selloff are set to return in earnest and one of them is the focus on quality by preferring single-A bonds over triple-B counterparts. This kind of bonds has the potential to become credit investors’ holy grail again as central bank tightening angst dominates markets.
Strong order books for Siemens’ bond issue -- despite the backdrop of a developing energy crisis -- show that the gravitational pull toward quality is becoming apparent again as credit’s summer rally rapidly loses steam. Europe’s corporate bonds have lost almost all of the summer gains as Fed Chair Jerome Powell made the case for a decisive fight against persistent inflation and markets brace for the possibility of a 75bps hike by the ECB next week. Against this backdrop, trades that proliferated during the first half’s selloff are set to return in earnest and one of them is the focus on quality by preferring single-A bonds over triple-B counterparts. This kind of bonds has the potential to become credit investors’ holy grail again as central bank tightening angst dominates markets.
Bottom-line: 성장률 하락이 두려워 중앙은행이 정책 선회를 할 것이라 기대하겠지만, 실제 이들은 성장률을 잠재성장률 아래로 떨어지게 만들고 실업률을 높여 인플레이션을 잡길 원한다.
Forget about a soft landing. Jerome Powell is now aiming for a "growth recession" — a protracted period of meager growth and rising unemployment that stops short of an outright contraction. The Fed's goal is to "grind inflation down by slowing growth below its potential," which officials peg at 1.8%, KPMG Chief Economist Diane Swonk said.
Forget about a soft landing. Jerome Powell is now aiming for a "growth recession" — a protracted period of meager growth and rising unemployment that stops short of an outright contraction. The Fed's goal is to "grind inflation down by slowing growth below its potential," which officials peg at 1.8%, KPMG Chief Economist Diane Swonk said.
Bottom-line: 아시아 및 유럽 시장에서 미국 선물이 하락해서 거래되어도 정규장에서 회복 및 상승하는 추세가 이젠 끝난 것 같음. 화요일 이 사례를 가장 잘 보여줬는데, 오프쇼어 거래에서 위험자산이 랠리를 시작한 듯 보였으나 온쇼어 거래에서 줄곧 하락해 마감했고, 이 패턴은 S&P 500 상장지수펀드의 정규장 누적 수익률 패턴서도 관찰됨.
Tuesday was a pretty good illustration of how things have changed recently. Twenty-four hours ago, markets looked primed for a sort of turnaround bounce in risk assets, but that ultimately fizzled quite badly by the time US markets closed on Tuesday afternoon. It seems as if the episode of intraday rallies in the equity market has come to an end, which rather suggests that the underlying bear market trend is back in force. Six weeks or so ago, I observed that equity markets had started to trade lower overnight, only to recover and keep going during regular US trading hours. That’s a reversal of the long-standing pattern of the past few decades, in which the bulk of cumulative gains have come via overnight gaps. Well, the market’s tendency to rally during regular hours continued up until the last week or two, but has now reversed quite notably, as you can see from the chart of cumulative 2022 regular session returns of the SPY ETF.
Tuesday was a pretty good illustration of how things have changed recently. Twenty-four hours ago, markets looked primed for a sort of turnaround bounce in risk assets, but that ultimately fizzled quite badly by the time US markets closed on Tuesday afternoon. It seems as if the episode of intraday rallies in the equity market has come to an end, which rather suggests that the underlying bear market trend is back in force. Six weeks or so ago, I observed that equity markets had started to trade lower overnight, only to recover and keep going during regular US trading hours. That’s a reversal of the long-standing pattern of the past few decades, in which the bulk of cumulative gains have come via overnight gaps. Well, the market’s tendency to rally during regular hours continued up until the last week or two, but has now reversed quite notably, as you can see from the chart of cumulative 2022 regular session returns of the SPY ETF.
Bottom-line: 중앙은행은 금리인상을 지속할 것이며, 내년에 금리인하로 돌아설 일은 없을 것임.
The Federal Reserve needs to raise its benchmark rate above 4% by early next year and leave it there for some time to help cool inflation, Cleveland Fed President Loretta Mester reiterated on Wednesday, making it clear she doesn’t expect the central bank to cut rates in 2023. “My current view is that it will be necessary to move the fed funds rate up to somewhat above 4% by early next year and hold it there,” Mester said Wednesday in remarks prepared for an event organized by the Dayton Area Chamber of Commerce. “I do not anticipate the Fed cutting the fed funds rate target next year.”
The Federal Reserve needs to raise its benchmark rate above 4% by early next year and leave it there for some time to help cool inflation, Cleveland Fed President Loretta Mester reiterated on Wednesday, making it clear she doesn’t expect the central bank to cut rates in 2023. “My current view is that it will be necessary to move the fed funds rate up to somewhat above 4% by early next year and hold it there,” Mester said Wednesday in remarks prepared for an event organized by the Dayton Area Chamber of Commerce. “I do not anticipate the Fed cutting the fed funds rate target next year.”
August drew to a close with equities, bonds and commodities posting monthly losses as central banks stepped up the fight against inflation. US stocks dropped, with the S&P losing 0.8%. Treasuries also fell, pushing 10-year yields up to around 3.19%, after a selloff in UK and euro-zone bonds.
Bottom-line: 그 어디에도 숨을 곳이 없었던 8월은 1981년 이후 40년만에 모든 최고 성과의 자산군에서도 마이너스 수익률을 기록함. 가장 덜 하락한 고수익 회사채도 -1.9%, 국채 -2.2%, 원자재 -3.9%, 주식 -4.2% 하락함. 성장전망이 악화되며 그 어떤 위험자산에도 우호적인 여건이 안된다는 평가도 있었음.
Bulls Starved in August Amid Broadest Cross-Asset Drop Since ‘81. Investors went hungry in August, denied by Jerome Powell’s Federal Reserve of opportunities to profit like no other month in four decades. From stocks to bonds and commodities, every major asset slid. The least-atrocious return was a 1.9% loss as shown in a Bloomberg index tracking high-yield corporate bonds. Worse was a 2.2% drop in Treasuries, a 3.9% decline in commodities and a 4.2% slide in the S&P 500. Rarely has advice not to fight the Fed borne out more severely. The last time the best-performing asset did worse in a month was December 1981. “The only way to make money in an absolute sense is cash or shorting something,” said James Athey, investment director at Aberdeen Asset Management. “The forward growth outlook is deteriorating. Risk assets are still nowhere near appropriately priced for such an environment and I expect weakness to continue.”
Bulls Starved in August Amid Broadest Cross-Asset Drop Since ‘81. Investors went hungry in August, denied by Jerome Powell’s Federal Reserve of opportunities to profit like no other month in four decades. From stocks to bonds and commodities, every major asset slid. The least-atrocious return was a 1.9% loss as shown in a Bloomberg index tracking high-yield corporate bonds. Worse was a 2.2% drop in Treasuries, a 3.9% decline in commodities and a 4.2% slide in the S&P 500. Rarely has advice not to fight the Fed borne out more severely. The last time the best-performing asset did worse in a month was December 1981. “The only way to make money in an absolute sense is cash or shorting something,” said James Athey, investment director at Aberdeen Asset Management. “The forward growth outlook is deteriorating. Risk assets are still nowhere near appropriately priced for such an environment and I expect weakness to continue.”
일반 용어: 다중자산 간 상관관계가 높아지면 위험을 방어 할 수단이 없음. 특히 위험균등전략처럼 주식과 채권의 상쇄효과가 대표적임. 경기 전망 악화로 주가와 금리가 동시에 하락하면 채권 가격이 오르면 수익률 방어.
여의도 VC 스타일 언어: 멀티에셋 코릴이 높다보니 헤지가 안됨. 리스크 패리티처럼 에쿼티/본드 얼로케이션을 통한 스테이블한 퍼폼이 어려움.
여의도 VC 스타일 언어: 멀티에셋 코릴이 높다보니 헤지가 안됨. 리스크 패리티처럼 에쿼티/본드 얼로케이션을 통한 스테이블한 퍼폼이 어려움.
Bottom-line: 갈라파고스.
The yen just hit a fresh 24-year low against the dollar, with USD/JPY propelled above July high of 139.39 by the supercharged yield-spread engine amid widening US-Japan policy divergence.
The yen just hit a fresh 24-year low against the dollar, with USD/JPY propelled above July high of 139.39 by the supercharged yield-spread engine amid widening US-Japan policy divergence.
Bottom-line: 절하되는 위안을 방어하기 위해 계속적으로 전문가들의 추정치보다 큰 폭의 차이를 둔 환율 고시를 하고 있음.
China kept up its resistance against yuan weakness by setting a stronger-than-expected currency fixing for a seventh straight day. The People’s Bank of China set the fix at 6.8821 per dollar, 103 pips stronger than the average estimate in a Bloomberg survey of analysts. On Tuesday, the PBOC set the yuan reference rate at 249 pips stronger than the average estimate in a survey of market participants, which was the second-strongest bias on record.
China kept up its resistance against yuan weakness by setting a stronger-than-expected currency fixing for a seventh straight day. The People’s Bank of China set the fix at 6.8821 per dollar, 103 pips stronger than the average estimate in a Bloomberg survey of analysts. On Tuesday, the PBOC set the yuan reference rate at 249 pips stronger than the average estimate in a survey of market participants, which was the second-strongest bias on record.