David Rosenberg and Marius Jongstra November 12 opinion Rosenberg: Pfizer’s promising COVID-19 vaccine is a potential game changer for the economy and how to invest. View the profiles of people named David Rosenberg. Join Facebook to connect with David Rosenberg and others you may know. Facebook gives people the power.
We are Introducing Weekly Snack with Dave, a synopsis of our most recent ideas—available for free.
Understanding Inflation
Because of base effects, lags from the weak dollar, and the impact (which will be transitory) from commodities, we are going to be seeing a near-term deviation of rising inflation on the long-term downtrend. But money velocity will continue to contract because it is clear that households are in a period of frugality and debt retrenchment that transcends the impact of the pandemic on consumer behavior.
A Little History Can Go a Long Way
David Rosenberg On Twitter
The lesson from the “Roaring Twenties” and the 1930s is that bonds can rally in the face of a stock market rebound, in the face of a growth rebound, and in the face of an inflation rebound, understanding that all of this is “temporary.” This is a tougher sell today for an investor base that considers a long-term horizon to be lunch next week, but the transitory nature of everything we are seeing right now, in the annals of economic history, will prove to have been a blip on the screen.
Bonds Shaken and Stirred
Treasury market sentiment is wildly bearish, and our bond duration model is flashing a “buy” signal. But the reflation “animal spirits” have taken over and it is difficult to know how far this yield overshoot can go. Drivers pegatron laptops & desktops. But in the end, it’s all about the Fed cycle. You don’t have bear markets in Treasuries when the Fed is not in a tightening phase.
Core Inflation is Vanishing (Contrary to What You Hear)
Well, we’ll have to wait a bit longer for the inflation bogeyman to show up after the release of the February CPI report. The headline came in as expected but the surprise was in the core ex-food & energy index, which came in light against expectations. Now, let’s assess the pattern in recent months, because the “momentum” in underlying inflation is actually subsiding — it’s going in the opposite direction as to what the inflation-phobes have been telling you.
Update on High Yield Valuations
Our multivariate regression model, which we use to assess the “fair value” of yields in the high yield market, suggests valuations have improved since the end of 2020. Nonetheless, we believe the high yield market is quite fully valued.
Moving Away From the Crowd
Speculators are long stocks, short Treasuries and short the U.S. dollar. This hasn’t happened very often in recent history. In fact, since 2010, we count three other instances where positioning was similar to what it is today — early-2011, late-2013 and early-2018. We realize this might be hard to believe given prevailing market sentiment, but when positioning becomes one-sided, it usually pays to go the other way.
Nice Canadian Jobs Jump but Still Almost 1 Million Jobs Shy of Where We “Should Be”
Well, that was an upside surprise, and adding more verve to a Canadian dollar, which had already been getting a lift from a rapid improvement in commodity markets. The combination of economic re-opening, the positive terms-of-trade shock and huge policy stimulus played a strong role in boosting Canadian employment by 259k in February. While the data were encouraging, the scarring in the labor market is rather evident. There are long-term structural issues that cannot be summarily dismissed.
These snippets are from Weekly Buffet with Dave, a Rosenberg Research publication that compiles the best articles of the week from Dave’s daily reports. To access the full report, sign up for a free trial.
We are Introducing Weekly Snack with Dave, a synopsis of our most recent ideas—available for free.
Understanding Inflation
Because of base effects, lags from the weak dollar, and the impact (which will be transitory) from commodities, we are going to be seeing a near-term deviation of rising inflation on the long-term downtrend. But money velocity will continue to contract because it is clear that households are in a period of frugality and debt retrenchment that transcends the impact of the pandemic on consumer behavior.
A Little History Can Go a Long Way
The lesson from the “Roaring Twenties” and the 1930s is that bonds can rally in the face of a stock market rebound, in the face of a growth rebound, and in the face of an inflation rebound, understanding that all of this is “temporary.” This is a tougher sell today for an investor base that considers a long-term horizon to be lunch next week, but the transitory nature of everything we are seeing right now, in the annals of economic history, will prove to have been a blip on the screen.
Bonds Shaken and Stirred
David Rosenberg And Twitter
Treasury market sentiment is wildly bearish, and our bond duration model is flashing a “buy” signal. But the reflation “animal spirits” have taken over and it is difficult to know how far this yield overshoot can go. But in the end, it’s all about the Fed cycle. You don’t have bear markets in Treasuries when the Fed is not in a tightening phase.
Core Inflation is Vanishing (Contrary to What You Hear)
Bounding Pulse Bounding pulses are present in febrile states, hyperthyroidism, exercise, anxiety, severe anemia, or complete heart block and with aortic runoff lesions that produce increased pulse pressure (aortic regurgitation, patent ductus arteriosus, arteriovenous malformations, aortopulmonary window, truncus arteriosus). Bounding pulse A bounding pulse is a strong throbbing felt over one of the arteries in the body. It is due to a forceful heartbeat. Bounding pulse. Bounding pulse also known as water hammer pulse, is a forceful pulse with a rapid upstroke and descent or strong throbbing felt over one of the arteries in your body. Bounding pulse is due to a forceful heartbeat. Bounding pulse is seen in many physiological and pathological conditions but is most often associated with aortic regurgitation 1).
Well, we’ll have to wait a bit longer for the inflation bogeyman to show up after the release of the February CPI report. The headline came in as expected but the surprise was in the core ex-food & energy index, which came in light against expectations. Now, let’s assess the pattern in recent months, because the “momentum” in underlying inflation is actually subsiding — it’s going in the opposite direction as to what the inflation-phobes have been telling you.
Update on High Yield Valuations
Our multivariate regression model, which we use to assess the “fair value” of yields in the high yield market, suggests valuations have improved since the end of 2020. Nonetheless, we believe the high yield market is quite fully valued.
Moving Away From the Crowd To do list on onenote.
Speculators are long stocks, short Treasuries and short the U.S. dollar. This hasn’t happened very often in recent history. In fact, since 2010, we count three other instances where positioning was similar to what it is today — early-2011, late-2013 and early-2018. We realize this might be hard to believe given prevailing market sentiment, but when positioning becomes one-sided, it usually pays to go the other way.
Rosenberg Research & Associates
Nice Canadian Jobs Jump but Still Almost 1 Million Jobs Shy of Where We “Should Be”
Well, that was an upside surprise, and adding more verve to a Canadian dollar, which had already been getting a lift from a rapid improvement in commodity markets. The combination of economic re-opening, the positive terms-of-trade shock and huge policy stimulus played a strong role in boosting Canadian employment by 259k in February. While the data were encouraging, the scarring in the labor market is rather evident. There are long-term structural issues that cannot be summarily dismissed.
Bianco Twitter
These snippets are from Weekly Buffet with Dave, a Rosenberg Research publication that compiles the best articles of the week from Dave’s daily reports. To access the full report, sign up for a free trial.