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Cartoon of the Day: The Dark Cloud of U.S. Growth

Cartoon of the Day: The Dark Cloud of U.S. Growth - GDP cartoon 10.29.2015

Our macro call here at Hedgeye remains #LowerForLonger (Rates) due to #SlowerForLonger (Growth). Witness today's U.S. 1.5% GDP report. The answer to Hedgeye CEO Keith McCullough's question below? Seems pretty self-evident. 

 

"When GDP gets cut by more than 50% quarter-over-quarter, the Fed should "raise rates", right?"


MTW | Operational Focus

Takeaway: The split is on track for February, but now with better leadership and significant identified restructuring opportunities.  We think that MTW is one of the most undervalued and least understood names in the sector.

 

 

Overview

 

We think that the departure of Glenn Tellock is a positive for MTW and that Hubertus Muehlhaeuser seems a very promising segment leader.  The restructuring opportunities in the 3Q release suggest a substantial opportunity to improve operations, which is not that surprising given a lack of prior operational attention.  The 3Q preannouncement was somewhat misleading, in our view, since it provided little context on weaker Crane results that we now know were driven heavily by delayed VPC shipments.  The planned split was defended robustly on the call, including the point that an investment grade credit rating for either segment is not needed.  In all, we continue to think the split will unlock substantial value and that MTW is one of the most undervalued and misunderstood companies in the sector. 

 

 

Highlights

 

Preannouncement Head Fake:  MTW’s preannounced a GAAP number, which we thought inappropriate given the separation costs.  Today, we learned that MTW had $10.4 million in costs associated with restructuring and separation, as well as a “ballpark” $15 million hit from delayed shipments of newly introduced VPC cranes (now corrected).  Backing out those items, MTW generated an estimated operating income of ~$68 million vs. $83 million in the year ago period.  While down, it is hardly as catastrophic as headlines suggested.  Those items should also have been disclosed in the preannouncement.

 

Split Defended Strongly:  Apparently, no one on the Board cares if Cranes is investment grade, or if it has a fairly small valuation and profitability.  We agree that the split is a great value-unlocking opportunity; as we see it, the Crane segment has a ‘negative’ valuation at present. We also think that the Cranes business is less broken than some believe (see below). 

 

Tellock Out Is A Positive:  It seems clear that Glenn Tellock was let go by the Board.  Hubertus Muehlhaeuser, the new head of the Foodservice business, sounded very strong on the earnings call this morning.  That is a significant upgrade from his introduction on the last call, when Tellock didn’t given him much of an introduction.  Hubertus’s presentation was detail oriented and he handled the Q&A effectively.  As we see it, Tellock did not appreciate activist meddling and never seemed on board with the split.

 

Restructuring Guidance Quite Large:  The restructuring announcements suggest a substantial opportunity to improve operations, which is not that surprising given a lackluster prior management team.  If you caught all of benefits from the restructuring items, it sounds as though Foodservice should spin with a substantial earnings growth opportunity baked in. Expect new management to market these, and we wouldn’t be surprised if more opportunities pop-up in Cranes as new leadership comes in.

  • Foodservice: The nearer-term consolidation of the Cleveland facility is expected to result in $30 million in cost savings next year, and $40 million by 2017.  Over the next 3 years, they indicated an extra 150 basis points to the margin in addition to that Cleveland restructuring.
  • Cranes: There should also be a benefit from the right-sizing and capacity reductions in the Crane segment of $35 - $45 million over the next three years, with a portion of that expected next year.  We should get more detail here as new leadership takes over.

 

 

Sentiment Very Negative, Inconsistent:  For a company with a solid value-unlock catalyst in just four months, the analyst community certainly hates MTW.  The questions from sell side analysts with higher ratings were even nasty in tone.  It isn’t clear to us how the price target from the Street could have been literally cut in half over the last year.  After all, it is the exact same group of businesses and the sales and margins in the Foodservice segment (the vast majority of the firm’s value) are higher today.

 

MTW | Operational Focus - MTW 1 10 29 15

 

 

Cranes Not Below Prior Trough If Appropriately Adjusted:  If the delay in VPC shipments is backed out, which is appropriate since it is associated with a hitch in a new product introduction, crane margins look much better – certainly above the prior cycle low.   Sales in the quarter would have been about $55 - $60 million higher at a “ballpark” 25% incremental margin.  Should this have been emphasized in the earnings release?  Obviously.  As for crane orders, the quarter was pretty weak.  That is a negative, but it is hard to say if the VPC issue also delayed orders or how much is related to weaker commodity prices – an impact that should roll off as construction is the key crane end market.

 

MTW | Operational Focus - MTW 2 10 29 15

 

 

Crane Orders Are Incredibly Noisy Quarter To Quarter:  The September quarter is typically the seasonally weakest.

 

MTW | Operational Focus - MTW 3 10 29 15

 

 

TTM Less Remarkable:  The trailing 12 month orders for the MTW crane segment shows a trend unlike the prior downcycle.

 

MTW | Operational Focus - MTW 4 10 29 15

 

 

Upshot:  The split is on track for February, but now with better leadership and significant identified restructuring opportunities.  We think that MTW is one of the most undervalued and least understood names in the sector.

 

 


[UNLOCKED] INITIAL JOBLESS CLAIMS | WU-XIA QUANT

Takeaway: The Fed has raised rates 9 times since April 2014 based on Wu-Xia math. This explains a) why growth is slowing and b) why it's late cycle.

Editor's Note: Below is a complimentary excerpt from a research note written today by our Financials team. If you'd like more information on how you can subscribe to our institutional research please send an email to sales@hedgeye.com

 

* * *

 

Claims are maintaining steady strength below 330k, rising by just 1k last week to 260k. However, even with claims now marking their 20th month below the 330k level, the Federal Reserve once again held the Fed Funds rate flat at zero yesterday. Last week, as we show in the chart below, we pointed out that this delay in a rate increase appears to be different versus previous cycles. Historically, by now the Fed would already be well underway raising rates. This is one of the arguments put forward by bulls for why the current cycle may not yet be long in the tooth.

 

[UNLOCKED] INITIAL JOBLESS CLAIMS | WU-XIA QUANT - Claims1

 

The reality, however, is that the Fed has actually been tightening policy since December 2013 when it began tapering QE3. Interestingly, as Christian Drake of our Macro Team pointed out, the Fed actually quantifies the effect of the current cycle's non-traditional policy action and the tapering thereof in the chart below with a measure called the Wu-Xia Shadow Fed Funds Rate (HERE). The Shadow Rate is basically the rate the Fed has set by implementing non-traditional policies. The following chart shows that we have been in a rising rate environment since April, 2014 and the effective Fed Funds rate has risen ~225 bps to -0.75% from -3%. This is one of the main reasons why a) growth is now slowing and b) the cycyle is, in fact, very late stage.

 

[UNLOCKED] INITIAL JOBLESS CLAIMS | WU-XIA QUANT - ShadowV2Claims20

 

On the energy front, claims in energy states continue to worsen versus the country as a whole as we approach the end of the year around which point many energy firms' hedges will roll over. The chart below shows that in the week ending October 17, the spread between the indexed series of energy state claims and country-wide claims widened to 22 from 20 in the prior week.

 

[UNLOCKED] INITIAL JOBLESS CLAIMS | WU-XIA QUANT - Claims18

 

The Data

Initial jobless claims rose 1k to 260k from 259k WoW. The prior week's number was not revised. Meanwhile, the 4-week rolling average of seasonally-adjusted claims fell -4k WoW to 259.25k.

 

The 4-week rolling average of NSA claims, another way of evaluating the data, was -9.2% lower YoY, which is a sequential improvement versus the previous week's YoY change of -8.2%

 

[UNLOCKED] INITIAL JOBLESS CLAIMS | WU-XIA QUANT - Claims2

 

[UNLOCKED] INITIAL JOBLESS CLAIMS | WU-XIA QUANT - Claims3


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ICI Fund Flow Survey | The Trillion Dollar Bet

Takeaway: Investors contributed to both risk asset classes last week but contributed more to bonds than equities, favoring measured risk.

Investment Company Institute Mutual Fund Data and ETF Money Flow:

Risk assets rebounded across the board in the 5-day period ending October 21st, signaling a temporary reduced level of worry in the marketplace. However, the +$6.0 billion net flow into total bond products (both mutual funds and ETFs) outpaced the +$3.3 billion inflow into total equity products, as investors still favored the relative safety of bonds over stocks. Only domestic equity mutual funds and hybrid mutual funds experienced redemptions last week with all other categories seeing new subscriptions as investors looked again to put money to work.

 

Additionally, money funds continued to rebuild balances, gaining another +$1 billion in contributions last week, bringing the 4Q15 total inflow to +$30 billion. This trend supports our Long recommendation on leading money fund manager Federated Investors (see our FII report). The long running equity bull market has been sourced by money coming off the sidelines and out of money funds which is why a late stage setup in equities should unwind the constant 6 year draw down in cash products. While cash balances in 3Q15 and 4Q15TD have started their seasonal rebuild with +$54 billion and +$30 billion moving back into the category, we note the substantial run in the S&P 500 has resulted in 20 out of 36 quarterly outflows in industry related cash products, with over $1.1 trillion being redeemed. As equities enter 2016 and beyond and into the late stages of this current economic expansion, this is the opportunity for leading money fund managers including Federated, BlackRock, and Legg Mason.

 

ICI Fund Flow Survey | The Trillion Dollar Bet - final front chart

 

In the most recent 5-day period ending October 21st, total equity mutual funds put up net inflows of +$1.5 billion, outpacing the year-to-date weekly average outflow of -$357 million and the 2014 average inflow of +$620 million. The inflow was composed of international stock fund contributions of +$1.6 billion and domestic stock fund withdrawals of -$70 million. International equity funds have had positive flows in 46 of the last 52 weeks while domestic equity funds have had only 10 weeks of positive flows over the same time period.

 

Fixed income mutual funds put up net inflows of +$3.1 billion, outpacing the year-to-date weekly average inflow of +$113 million and the 2014 average inflow of +$926 million. The inflow was composed of tax-free or municipal bond funds contributions of +$405 million and taxable bond funds contributions of +$2.7 billion.

 

Equity ETFs had net subscriptions of +$3.3 billion, outpacing the year-to-date weekly average inflow of +$1.9 billion and the 2014 average inflow of +$3.2 billion. Fixed income ETFs had net inflows of +$2.8 billion, outpacing the year-to-date weekly average inflow of +$1.2 billion and the 2014 average inflow of +$1.0 billion.

 

ICI Fund Flow Survey | The Trillion Dollar Bet - ICI1

 

Mutual fund flow data is collected weekly from the Investment Company Institute (ICI) and represents a survey of 95% of the investment management industry's mutual fund assets. Mutual fund data largely reflects the actions of retail investors. Exchange traded fund (ETF) information is extracted from Bloomberg and is matched to the same weekly reporting schedule as the ICI mutual fund data. According to industry leader Blackrock (BLK), U.S. ETF participation is 60% institutional investors and 40% retail investors.



Most Recent 12 Week Flow in Millions by Mutual Fund Product: Chart data is the most recent 12 weeks from the ICI mutual fund survey and includes the weekly average for 2014 and the weekly year-to-date average for 2015:

 

ICI Fund Flow Survey | The Trillion Dollar Bet - ICI2

 

ICI Fund Flow Survey | The Trillion Dollar Bet - ICI3

 

ICI Fund Flow Survey | The Trillion Dollar Bet - ICI4

 

ICI Fund Flow Survey | The Trillion Dollar Bet - ICI5

 

ICI Fund Flow Survey | The Trillion Dollar Bet - ICI6



Cumulative Annual Flow in Millions by Mutual Fund Product: Chart data is the cumulative fund flow from the ICI mutual fund survey for each year starting with 2008.

 

ICI Fund Flow Survey | The Trillion Dollar Bet - ICI12

 

ICI Fund Flow Survey | The Trillion Dollar Bet - ICI13

 

ICI Fund Flow Survey | The Trillion Dollar Bet - ICI14

 

ICI Fund Flow Survey | The Trillion Dollar Bet - ICI15

 

<chart16>



Most Recent 12 Week Flow within Equity and Fixed Income Exchange Traded Funds: Chart data is the most recent 12 weeks from Bloomberg's ETF database (matched to the Wednesday to Wednesday reporting format of the ICI), the weekly average for 2014, and the weekly year-to-date average for 2015. In the third table are the results of the weekly flows into and out of the major market and sector SPDRs:

 

ICI Fund Flow Survey | The Trillion Dollar Bet - ICI7

 

ICI Fund Flow Survey | The Trillion Dollar Bet - ICI8



Sector and Asset Class Weekly ETF and Year-to-Date Results: In sector SPDR callouts, investors redeemed -$420 million or -5% from the industrials XLI ETF while contributing +$436 million or +4% to the energy XLE.

 

ICI Fund Flow Survey | The Trillion Dollar Bet - ICI9



Cumulative Annual Flow in Millions within Equity and Fixed Income Exchange Traded Funds: Chart data is the cumulative fund flow from Bloomberg's ETF database for each year starting with 2013.

 

<chart17>

 

<chart18>



Net Results:

The net of total equity mutual fund and ETF flows against total bond mutual fund and ETF flows totaled a negative -$1.2 billion spread for the week (+$4.8 billion of total equity inflow net of the +$6.0 billion inflow to fixed income; positive numbers imply greater money flow to stocks; negative numbers imply greater money flow to bonds). The 52-week moving average is +$1.6 billion (more positive money flow to equities) with a 52-week high of +$27.9 billion (more positive money flow to equities) and a 52-week low of -$19.0 billion (negative numbers imply more positive money flow to bonds for the week.)

  

ICI Fund Flow Survey | The Trillion Dollar Bet - ICI10

 


Exposures:
The weekly data herein is important for the public asset managers with trends in mutual funds and ETFs impacting the companies with the following estimated revenue impact:

 

ICI Fund Flow Survey | The Trillion Dollar Bet - ICI11 



Jonathan Casteleyn, CFA, CMT 

 

 

 

Joshua Steiner, CFA







Not Another GDP Summary Note...

Key Takeaway: Our forecasts for domestic economic growth continue to be proven most accurate and we continue to anticipate things will get a lot worse from here.

 

 

REVIEWING THE DATA

 

What did we know coming in:

 

  • Trade Balance: Global growth was slowing, export demand would remain weak and the trade balance was going to be a drag
  • Industrial Recession: Domestic manufacturing and industrial activity (negative growth Durable goods, Core Capex & Factory Orders) were going to be soft
  • Investment:  Inventory levels and Inventory-to-Sales ratios were at cycle peaks  (ISM, Census Bureau) and likely to be a negative contributor
  • Government: Government was probably not going to be an outlier and may provide some modest upside with spending getting a little pop into fiscal year end
  • Consumption:  Consensus was looking for consumption to singularly carry the growth load.  We knew from the July/Aug PCE data that household spending would again be good on an absolute basis although the slope of the line would remain in retreat off the 1Q15 peak. Further, with retail sales (i.e. good consumption) flagging, services consumption would carry the consumption load

 

What did we get:  Headline Real GDP growth slowed to 1.5% QoQ SAAR with year-over-year growth decelerating for a 2nd straight quarter to 2.0% from +2.7%. No real surprises with Consumption contributing almost all of the headline gain, Government providing a small positive contribution, Investment tanking and Net Exports contracting.

 

  • Consumption:  Contributing +2.19 to headline and decelerating QoQ  to +3.2%.  Services had outsized positive impact with Healthcare adding a notable +50bps to headline.  To reiterate, Consumption was again good on an absolute basis but the slope of the line remains negative with 3Q representing a 2nd quarter of deceleration off the 1Q15 peak.  Consumption comps get tougher from here and income growth (i.e. the driver of the capacity for consumption growth) is likely to moderate alongside slowing payroll gains.
  • Investment:  Contributing -0.97 and declining -5.6% QoQ with deceleration across the board. Both Residential and Nonresidential Investment decelerated sequentially and Inventories contributed a remarkable -146bps to the headline number
  • Government: Contributing +30 bps but decelerating -90bps QoQ
  • Trade Balance:  More balanced than expected but still a modest negative contributor. 
  • Deflator:  GDP price index and Core PCE decelerated sequentially (on QoQ basis) with core PCE coming in at 1.3% for the quarter

 

What did we learn:  Policy makers look at GDP sub-aggregates to gauge the strength of underlying domestic demand independent of international factors and some of the more volatile components. Each were better than headline growth, but all decelerated sequentially.

 

  • Real Final Sales (GDP less Inventory Change):  decelerating -90bps sequentially to +3.0% QoQ SAAR
  • Gross Domestic Purchases (GDP less exports, including imports):  decelerating -210bps sequentially to +1.5% QoQ SAAR
  • Real Final Sales to Domestic Purchasers (GDP less exports less inventory change):  decelerating -70bps sequentially to +2.9% QoQ SAAR

 

Not Another GDP Summary Note... - GDP Summary Table

 

Not Another GDP Summary Note... - PCE Growth ST

 

Christian Drake

Senior Analyst

 

REFRESHING THE OUTLOOK

 

Updating the GIP Model: The +2% YoY growth rate recorded in 3Q15 represented a -70bps deceleration from 2Q15’s +2.7% YoY growth rate and a -90bps deceleration from the cycle-peak recorded in 1Q15. In conjunction with a +10bps acceleration in the average rate of CPI during the quarter, the U.S. economy landed squarely in #Quad3 for the third quarter of 2015. Our forecast range of +1.6% to +1.9% YoY (which translates to +0.5% to +1.7% QoQ SAAR) for 4Q15E implies the U.S. economy is likely to close out 2015 with a third straight quarter in #Quad3. From the perspective of our proprietary asset allocation strategy process, 3Q15 was as classic a #Quad3 outcome as one can find. Specifically, within both equities and fixed income, the factor exposures which have typically performed best during historical episodes of #Quad3 performed best during the quarter and the factor exposures which have typically performed worst during historical episodes of #Quad3 were among the laggards this time around. We expect this trend to continue – with one caveat: the policy adjustments of Draghi (ECB), Kuroda (BoJ) and Carney (BoE) should continue to perpetuate deflation throughout the commodity complex via a stronger USD (CLICK HERE for more details).

 

Not Another GDP Summary Note... - 1

 

#Quad3 LONGS: Utilities (up +4.4% in 3Q), REITS (up +2.0% in 3Q) and Treasury Bonds (10Y Yield down -32bps in 3Q):

 

Not Another GDP Summary Note... - Utilities

 

Not Another GDP Summary Note... - FTSE NAREIT Index

 

Not Another GDP Summary Note... - 10yr Yield

 

#Quad3 SHORTS: S&P 500 (down -6.9% in 3Q), Materials (down -17.3% in 3Q), Financials (down -7.2% in 3Q) and High Yield Credit (Yields up +148bps and OAS up +154bps, on average, in 3Q):

 

Not Another GDP Summary Note... - SPX

 

Not Another GDP Summary Note... - Materials

 

Not Another GDP Summary Note... - Financials

 

Not Another GDP Summary Note... - HY OAS

 

Reviewing the Base Effects: Largely due to how we model GDP using a proprietary Bayesian Inference Process, 3Q15 marked the third straight quarter in which our model has pinned-the-tail-on-the-advance-GDP-estimate-donkey (see: 1Q15 and 2Q15). Notwithstanding the fact that the Bloomberg Consensus estimate for 3Q15E peaked at 3% QoQ SAAR in August, we continue to espouse the merits of modeling the macro economy like any thoughtful analyst would model a micro company – on a YoY basis. Refer to our 9/2 white paper titled, “Do You QoQ?” for a detailed explanation of this omnipotent distinction. Simply put, when base effects accelerate and/or remain elevated for an extended period of time, growth rates tend to slow on a trending basis. The opposite outcome holds true for growth rates that encounter decelerating and/or consistently subdued base effects. All told, U.S. Real GDP growth slowed right on queue into steepening base effects in 3Q15. Moreover, these “comps” are set to remain extremely difficult for the next four quarters, which implies the sine curve of underlying U.S. economic growth that oscillates between +1% and +3% is likely to mean revert back to the low end of that range of probable outcomes over the next few quarters. Indeed, domestic economic growth is now well past its cyclical and structural peaks and history has proven that rolling off the latter is bad.

 

Not Another GDP Summary Note... - 2

 

Not Another GDP Summary Note... - Trend GDP vs. S P 500

 

Not Another GDP Summary Note... - Trend GDP vs. Recessions

 

Assessing Our Predictive Tracking Algorithm: Not much to say here other than the loss of sequential momentum is now obvious to anyone who dares to view the data. With the domestic industrial and earnings recessions ongoing, the risk to consensus forecasts for domestic economic growth is primarily centered on hopeful expectations for the U.S. consumer. But with various metrics of household consumption growth and gauges of services sector activity rolling off their respective ~10Y-highs, we continue to find it more appropriate to position for trending deceleration in these metrics, rather than improbable suspension of economic gravity. As we penned in our 10/27 note titled, “Is the Bear Market Priced In?”, this is a run-of-the-mill #LateCycle Slowdown in which inflation and capital expenditures peak and roll first, followed by employment growth and ultimately by consumer spending. No sense in making it any more complicated than that.

 

Not Another GDP Summary Note... - 3

 

Not Another GDP Summary Note... - Bloomberg Consensus 2016 GDP Estimate

 

All told, feel free to rely on our competitors’ forecasts for domestic and/or global growth and inflation at your own risk. As the only accredited firm that actually called for the 2015 industrial and earnings recessions that would stem from our 2014 #GlobalDeflation call, we believe we have more than earned enough ethos to help steer investors to the right side of the mid-cycle (Consensus Macro) vs. late-cycle (Hedgeye) debate.

 

Darius Dale

Director


INITIAL JOBLESS CLAIMS | WU-XIA QUANT

Takeaway: The Fed has raised rates 9 times since April 2014 based on Wu-Xia math. This explains a) why growth is slowing and b) why it's late cycle.

Claims are maintaining steady strength below 330k, rising by just 1k last week to 260k. However, even with claims now marking their 20th month below the 330k level, the Federal Reserve once again held the Fed Funds rate flat at zero yesterday. Last week, as we show in the chart below, we pointed out that this delay in a rate increase appears to be different versus previous cycles. Historically, by now the Fed would already be well underway raising rates. This is one of the arguments put forward by bulls for why the current cycle may not yet be long in the tooth.

 

INITIAL JOBLESS CLAIMS | WU-XIA QUANT - Claims1

 

The reality, however, is that the Fed has actually been tightening policy since December 2013 when it began tapering QE3. Interestingly, as Christian Drake of our Macro Team pointed out, the Fed actually quantifies the effect of the current cycle's non-traditional policy action and the tapering thereof in the chart below with a measure called the Wu-Xia Shadow Fed Funds Rate (HERE). The Shadow Rate is basically the rate the Fed has set by implementing non-traditional policies. The following chart shows that we have been in a rising rate environment since April, 2014 and the effective Fed Funds rate has risen ~225 bps to -0.75% from -3%. This is one of the main reasons why a) growth is now slowing and b) the cycyle is, in fact, very late stage.

 

INITIAL JOBLESS CLAIMS | WU-XIA QUANT - ShadowV2Claims20

 

On the energy front, claims in energy states continue to worsen versus the country as a whole as we approach the end of the year around which point many energy firms' hedges will roll over. The chart below shows that in the week ending October 17, the spread between the indexed series of energy state claims and country-wide claims widened to 22 from 20 in the prior week.

 

INITIAL JOBLESS CLAIMS | WU-XIA QUANT - Claims18

 

The Data

Initial jobless claims rose 1k to 260k from 259k WoW. The prior week's number was not revised. Meanwhile, the 4-week rolling average of seasonally-adjusted claims fell -4k WoW to 259.25k.

 

The 4-week rolling average of NSA claims, another way of evaluating the data, was -9.2% lower YoY, which is a sequential improvement versus the previous week's YoY change of -8.2%

 

INITIAL JOBLESS CLAIMS | WU-XIA QUANT - Claims2

 

INITIAL JOBLESS CLAIMS | WU-XIA QUANT - Claims3

 

INITIAL JOBLESS CLAIMS | WU-XIA QUANT - Claims4

 

INITIAL JOBLESS CLAIMS | WU-XIA QUANT - Claims5

 

INITIAL JOBLESS CLAIMS | WU-XIA QUANT - Claims6

 

INITIAL JOBLESS CLAIMS | WU-XIA QUANT - Claims7

 

INITIAL JOBLESS CLAIMS | WU-XIA QUANT - Claims8

 

INITIAL JOBLESS CLAIMS | WU-XIA QUANT - Claims9

 

INITIAL JOBLESS CLAIMS | WU-XIA QUANT - Claims10

 

INITIAL JOBLESS CLAIMS | WU-XIA QUANT - Claims11

 

INITIAL JOBLESS CLAIMS | WU-XIA QUANT - Claims19

 

Yield Spreads

The 2-10 spread rose 1 basis points WoW to 141 bps. 4Q15TD, the 2-10 spread is averaging 143 bps, which is lower by -10 bps relative to 3Q15.

 

INITIAL JOBLESS CLAIMS | WU-XIA QUANT - Claims15

 

INITIAL JOBLESS CLAIMS | WU-XIA QUANT - Claims16

 

Joshua Steiner, CFA

 

Jonathan Casteleyn, CFA, CMT

 


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