Markets News Stocks 

Short-term bond yields are finally more attractive than dividend stocks

“In fact, short-term yields look much more attractive than many stock dividends and longer-dated fixed income instruments” writes Nathan Chiaverini for marketwatch.com. Jerome Schneider is PIMCO’s head of short-term portfolio management.Low cost of liquidity: Transaction costs for short-term bonds tend to be low.Andrew Wittkop is a portfolio manager focusing on Treasury bonds, agencies and interest rate derivatives, and Nathan Chiaverini is a portfolio manager on the short-term portfolio management team.Positive absolute-return potential: Higher-yielding short-term investments can help hedge bond portfolios from the impact of rising rates. Source: marketwatch.com Share This:

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News Regulators 

The Fed is an open book, but foreign trade and security are the wild cards

“Anybody capable of reading the Fed’s balance sheet can get an instant fix on what the American monetary authorities are up to” writes Adam Jeffery for cnbc.com. The difficulty here is that the Fed, and the Fed observers, must operate with expected — i.e., short-term forecast — values of these two policy variables.There is no need to bother with “forward guidance” — a bunch of confusing and contradictory statements serving as betting fodder for in-out trades and the Fed’s trail covers between bi-weekly reserves reporting periods. Source: cnbc.com Share This:

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News Oil 

Rising oil prices, strong construction demand boost John Deere profit

“Spurred by rising oil prices, growth in construction and robust housing demand, Deere & Company on Friday reported a significant uptick in sales” writes Seth Perlman for washingtonexaminer.com. Revenue at the Moline, Ill.-based company that owns the John Deere tractor brand climbed 29 percent to $10.72 billion for the three months through April 29. Deere & Company’s stock rose 5.1 percent to $154.32 in New York trading on Friday.Despite concerns over the Trump administration’s actions on trade, the company said, overall farmer sentiment is upbeat. Source: washingtonexaminer.com Share This:

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Markets News 

You shouldn’t fear bonds just because yields are rising

“Bonds lose value in the short term when rates rise, but rising rates ultimately lead to higher future bond returns as your long bonds become short bonds which then get reinvested in higher-yielding bonds” writes Cullen Roche for marketwatch.com. Short-term rates are up even more, with the three-month T-bill jumping from 0.9% to 1.9%.So the scenario with rapidly rising rates looks unlikely to me.Neither are high and moderately rising rates. Source: marketwatch.com Share This:

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News Oil 

OPEC sees oil rally towards $80 as short-term spike, not supply-driven

“The view of top exporter Saudi Arabia is that any brief, speculator-driven jump in oil prices is not sufficient grounds for producers to boost output, an OPEC source familiar with the kingdom’s thinking said” reports businessinsider.com. For such a decision to occur, the rally would need to be driven by data pointing to a supply impact, the source said. “When oil prices rise due to geopolitical concern and not due to demand and supply and fundamentals, it cannot be reasonable,” a source familiar with Iranian thinking said of the current…

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News Regulators 

Fed’s Williams defines neutral short-term interest rate as 2.5%

“The neutral level of short-term interest rates that is neither boosting nor retarding the U.S. economy is 2.5%, said San Francisco Fed President John Williams, on Tuesday” writes Senior Economics Reporter for marketwatch.com. The neutral rate is affected by global economic conditions, not just those in the U.S., he said. Williams, a voting member of the Fed policy committee, is moving to take over the influential New York Fed president’s post next month.After the last rate hike in March, the federal funds rate is below neutral, in a range of…

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News 

An almost certain rate hike from the Bank of England looks set to be postponed

“A month ago, short-term interest rates had been pricing in another 25 basis point rate hike with near certainty (90 percent odds)” writes Justin Tallis for cnbc.com. Short-term interest rates are now pricing in less than a 10 percent probability of a hike this Thursday.The Bank of England’s (BOE) Monetary Policy Committee (MPC) meets Thursday and is expected to keep interest rates unchanged, marking a sharp turnaround from early projections just a few weeks ago. Source: cnbc.com Share This:

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Crypto News 

Gartner Report: 34 Percent of CIOs Have No Interest…

“A further eight percent said that they were in short-term planning or active experimentation with the blockchain” writes Rebecca Campbell for livebitcoinnews.com. New research has found that a low number of companies have adopted the blockchain, highlighting that many remain weary to its benefits.Notably, though, 77 percent said that their organisation had no interest in adopting the technology and/or no action planned to investigate or develop it.A further 18 percent said that the skills required for the blockchain are the most difficult to find.The survey also found that CIOs recognised…

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AUD News 

Bearish on EUR/USD, GBP/USD, AUD/USD, and NZD/USD – UOB

“Here is their view, courtesy of eFXdata: EUR/USD: Bearish (since 01 May 18, 1.2075): EUR has to stay below 1.1910/15 or the risk of a short-term low would increase quickly” writes Yohay’s Google Profile for forexcrunch.com. NZD/USD: Bearish (since 02 May 18, 0.7005): Increasing risk of a short-term low. Source: forexcrunch.com Share This:

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Markets News 

Trump proposal could mean healthy people save on insurance while others get priced out

“The Trump administration predicts only 100,000 to 200,000 people will be tempted out of the ACA market into short-term plans” writes Carolyn Johnson Is for washingtonpost.com. Some health policy experts say they fear the expansion of these skimpy plans will encourage healthy people to abandon the ACA-compliant markets, which would raise prices for those who remain. Source: washingtonpost.com Share This:

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