1.Junk Bond ETF Makes New Highs in 2017…$434 Billion of maturing junk paper must be refinanced in next 2 years.
50day thru 200 day to upside on Weekly Chart
1.Measuring Europe Thru German Leadership.
German economic growth accelerated more than analysts forecast last year to its fastest pace since 2011,
as falling unemployment and record-low interest rates boosted spending. According to the Federal Statistics Office, GDP growth rose 1.9%, after a gain of 1.7% the previous year. Germany is the first of the world’s biggest developed economies to provide preliminary GDP data for 2016.
German DAX-Sideways then Breakout….7% Spike 2017
1.Nasdaq 269% Off Bottom.
Chart of the Day
For some perspective on the post-financial crisis rally, today’s chart illustrates how much of the downturn that occurred as a result of the financial crisis has been retraced by each of the five major stock market indexes. For example, the Dow peaked at 14,164.53 back in October 9, 2007 and troughed at 6,547.05 back on March 9, 2009. The most recent close for the Dow is 19,855.53 — it has retraced 174.7% of its financial crisis bear market decline. As today’s chart illustrates, each of these five major stock market indices have retraced over 170% of their financial crisis decline. However, it is the tech-laden Nasdaq that leads the pack with a retracement of 269% — impressive considering the severity of the financial crisis bear market.
1. Gundlach Deck is Out…10 Year Taking Out 3% in 2017—End of 35 Year Bond Bull?
“Almost for sure we’re going to take out 3% on the 10-year in 2017,” Gundlach said. If we exceed 3% (not 2.6%) in 2017, it’s goodbye to the bull market because you would no longer have declining peaks in yields.
A 10-year above 3%, with the 30-year yield approaching 4%, would also be trouble for the equity market because they would start to look like ‘real’ yields to investors.
Gundlach said it’s not radical to forecast a 6% yield on the 10-year by 2020.
1.Munis See Big Outflows in 2016
Credit: The muni market capital outflows have been substantial, resulting in a rare loss for intermediate-maturity bonds.
Source: Barclays, @NickatFP, @joshdigga