The firm’s latest fund manager survey showed that 34% of investors think a recession is likely in the next 12 months, while 64% still think one is unlikely. That brings the overall recession probability to the highest since 2011, according to BAML’s survey, which consists of 171 panelists managing a total of $455 billion.
Bank stocks led the declines as it gets tougher for the group to make a profit lending money in such an environment. Bank of America and Citigroup fell 4.6% and 5.3% respectively, while J.P. Morgan dropped 4.2%. The financials sector dipped into correction territory, down more than 10% from a recent high.
“It’s an absurdly odd world and it signals two things,” said investment banker Daniel Alpert, managing partner at Westwood Capital. “There’s an obvious, persistent and continuous glut of underutilized capital and there’s no place in the advanced world for that capital to be invested without excess risk.”
“Negative yields are symptomatic for the search for safe assets. The reason they’re trading at negative yields is because the demand for safe assets is bigger than the supply for them,′ said Ghali. “Gold stands to benefit quite a bit from that.. the trade we’ve been recommending we have it as a three moth time horizon. I would argue we are likely on the cusp of a multi-year bull market for gold.”
That is called an inverted yield curve, and it is a sign that bond investors foresee weak growth and lower inflation in years ahead, and expect the Federal Reserve will respond by cutting interest rates. An inverted yield curve has often been a harbinger of recession, though not a guarantee of one.
“We’re heading into a global recession and central banks don’t have much ammunition to counter it,” said Nader Naeimi, AMP Capital Investors Ltd.’s head of dynamic markets in Sydney. “The huge shock from the trade war has basically offset whatever central banks are doing, and that’s some of the signals from the yield-curve inversion.”
The low rates aren’t doing as much to spur home purchases, with those loans only up 2% from the previous week and 12% from a year ago. Those figures are partly due to limited availability of homes for sales. The number of existing homes sold in June fell about 2% compared to May and a year earlier, according to a separate report from the National Association of Realtors. The limited supply of homes has worked to drive up home prices, which have risen steadily for the last seven years at three times the pace of wage growth.
The declines come against a broader market move downward, as investors worry about whether the U.S. economy is slipping into another recession. The bond market on Wednesday morning was flashing its biggest recession signal yet, with the widely watched spread between the yield on the 2-year Treasury note and the yield on the 10-year note inverted.
China: Paper Tiger (thc0655)
An objective analysis of China must begin with its enormous strengths. China has the largest population in the world, about 1.4 billion people (although soon to be overtaken by India). China has the third largest territory in the world, 3.7 million square miles, that’s just slightly larger than the United States (3.6 million square miles), and only slightly behind Canada (3.8 million square miles).
Furthermore, researchers say that frequent recommendations from the U.S. government on how to prepare for potential disasters, such as when residents of certain communities are advised to stockpile water in preparation for a hurricane or blackout, have also contributed to the rising number of doomsday preppers in the United States.
Grenell is behaving, “as if the United States still occupying power here,” lamented the FDP politician. But Germany is “a sovereign country”. He added: “It should not be allowed to give the impression that the ambassadors of other countries determine the domestic policy here”.
On the night of May 13, 2019, UCLA astronomer Tuan Do and his colleagues were watching Sgr A* using the Keck Telescope on the summit of Mauna Kea in Hawai’i. In a period of just two hours, they witnessed the black hole become 75 times brighter in the near-infrared band of the light spectrum.
K.I.S.S. Strategy – Part One (GE Christenson)
Interest rates on $15 trillion in global sovereign debt are negative. Argentina issued 100-year bonds. Others have reported that many junk bonds now sell with negative interest rates. This is craziness and smells like desperation during “end-of-cycle” insanity.
The disconnect between Maine’s aging population and its need for young workers is expected to be mirrored throughout the country, demographic experts say.
If the horrific weather and endless flooding wasn’t enough, about a week ago the Chinese government announced that they would be ending all “purchases of U.S. agricultural products”, and that was a devastating blow for farmers all over the nation.
In particular, soybean farmers are going to see demand for their crops absolutely collapse. In recent years, China has purchased approximately 60 percent of all U.S. soybean exports.
Russian officials’ failure to release full details surrounding the explosion, which killed at least seven employees of Rosatom, Russia’s atomic energy monopoly, and of the Defense Ministry, have raised suspicions over the severity of the accident and whether officials are covering up details.
Arctic wildfires differ from mid-latitude fires, such as those in California and Idaho. For one, fires in the lower 48 are often set by humans and are put out as fast as possible, since they are a risk to life and property. In the boreal forest and tundra, wildfires are mostly ignited by lightning strikes and are usually left to burn unless they threaten important infrastructures or human settlements. As a result, they often grow large and consume hundreds of thousands of acres of vegetation.
In addition to the fires in Alaska, on July 10 a satellite detected heat signatures in Greenland that were consistent with those seen at wildland fires. And another satellite photographed what appears to be smoke.
Scientists have found microplastic particles in rain before. They saw it in the rain falling in the Pyrenees in southern France. It has wound up in remote and otherwise pristine islands. Trillions of pieces of plastic litter float through the ocean, killing fish and other animals. An earlier study found that people are swallowing an average of 5 grams of plastic every week, about the weight of a credit card.
It’s unclear what the health effects of living with all this plastic will be, scientists say, although several studies are underway.
Previous research found microplastics were trapped in sea ice, remnants of plastic bits likely transported via the ocean. But the new findings, which involve some of the same researchers, looked at snow on top of ice floes to assess whether microplastic was blowing in the wind to the Arctic as well.
Gold & Silver
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