Client Talking Points
Yet another down day for the Japanese Yen to new year-to-date lows and the Nikkei ramp on that remains epic – Japanese stocks are up for the 10th day in a row (that hasn’t happened in 27 years) to +18.7% year-to-date vs SPX +3.1%.
Global Bond Yields have returned to the long-term bond investor TREND of falling as Global Growth Expectations slow. The Swiss 10YR is down -2 basis points back to -0.06% and the German 10YR is down -3 basis points to 0.53%. We suggest you stay with those Long Bonds in the U.S. at 2.14%.
What’s a -6.5% down day at the Shanghai Composite Casino amongst friends? The Chinese will definitely need another round of rumoring tonight – that’s all there is to do as China’s population gets older at its fastest rate, ever #GrowthSlowing.
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Top Long Ideas
One way to invest in Lower-For-Longer, from an equity perspective, is being long U.S. REITS (VNQ). Unless the Fed wants to show the world it has the power to go both ways on rates, we don’t think the Fed will ever be able to justify hiking interest rates. We expect an unarguable slowing of the current economic cycle by Q4 of this year. If you think domestic economic growth is slow now, just wait until the U.S. economy faces very difficult growth and inflation comps in the second half of 2015.
Housing got its mojo back in May, rebounding strongly over the last couple of weeks alongside the moderation in rates and ongoing strength in reported price/volume data. Below is a round-up of the data thus far in 2Q:
The strength of the labor market continues to be a good indicator of our positioning in the current cycle:
Three for the Road
TWEET OF THE DAY
GOLD: immediate-term upside in my risk range to $1209/oz
QUOTE OF THE DAY
If you cannot do great things, do small things in a great way.
STAT OF THE DAY
2 billion videos are watched daily on Snapchat by 13 to 34 year olds (according to Snapchat).
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