Credit: The muni market capital outflows have been substantial, resulting in a rare loss for intermediate-maturity bonds.
Source: Barclays, @NickatFP, @joshdigga
China is making it harder to short the Yuan and more difficult to take money out of the country, but time will tell if they can protect the currency forever. …If not, a free floating Yuan will be a new ball game for all currencies.http://www.barrons.com/articles/the-growing-threat-to-global-trade-a-currency-war-1483767171
I find more reason for optimism in the yield curve – the plot of the yields on 3-month through 30-year Treasury securities. The yield curve has steepened since the election, and this is good news.
The slope of the yield curve has borne a consistent relationship with economic activity. The yield curve has predicted all U.S. recessions except one since 1950. Recessions, as you would expect, correlate positively with bear markets. When the yield curve flattens, or inverts, a recession usually looms and so does a bear market.
That’s not the case today. The yield curve is just the way we should like it – progressively higher with each maturity and upward sloping to the right. When the yield curve steepens, economic growth usually follows.
Yield Curve Slope
http://etfdailynews.com/2017/01/04/dow-20k-is-just-the-beginning-of-a-massive-rally-in-2017/
Since then, the iShares Russell 1000 Value ETF (ticker: IWD) has returned 17%, versus 9.1% for the iShares Russell 1000 Growth (IWF). The last stretch of significant outperformance for value ended in 2006, and it was a whopper. Value beat growth by double-digit percentages in five out of seven years, starting with the 2000 dot-com stock bust.
http://www.barrons.com/articles/will-2017-be-the-year-of-the-trump-rooster-1483169072
