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EURO 1.105 // OIL 45.57 // GOLD 1355 // BIT 653
The current election cycle has been marked by mass protests, rallies, and deepening party lines. Regardless of who Americans are voting for, seven in ten say they feel the country is on the wrong track, according to the WSJ. Promises of wholesale economic growth from previous decades have widened gaps between rich and poor and left structural employment problems, leaving many Americans feeling left behind.
1.36%
The US 10-year government bond's lowest yield ever, hit earlier this week. In a global context, this yield is actually quite robust: according to Citi, around one third ($7 trillion) of all developed country sovereign debt now has negative rates, effectively charging lenders for borrowed money and paying borrowers for taking on risk.
NOTE: If article is paywalled, use Google to search for title or try accessing via mobile
CREDIT:
10-year Treasury Yields Hit Record Low, USA Today
The yield on the benchmark US Treasury bond hit an all-time low this past Tuesday, as investors fled post-Brexit to the lowest risk assets they could find, pushing up Treasury prices. Bond yields fall as prices rise.
M&A:
Dare to Dream: The Bank Mergers That Could Help Fix the Industry, Bloomberg
M&A:
Dare to Dream: The Bank Mergers That Could Help Fix the Industry, Bloomberg
Stagnant growth and lower valuations would push most other industries into an M&A glut, but regulatory concerns about too-big-to-fail banks are pushing financials to stay smaller. But some particularly hard-hit banks are better situated than others to gain from merger activity.
DEMOGRAPHICS:
Election 2016 is Propelled by American Economy's Failed Promises, WSJ (paywalled)
The Wall Street Journal begins a multipart series examining why promises made in 2000 about how technology, trade, and competent central banking could maintain an indefinite period of US economic growth are now seen as oversimplified and incorrect, leading to extreme reactions among voters.
CHINA:
Brexit is Helping China Push Down the Yuan, WSJ (paywalled)
As China shifts to slower growth associated with a cleaner, services-led economic model and domestic consumption, weakening the yuan as a strategic move to keep exports competitive. But a weaker currency also means capital flight--over $550 billion of outflows are anticipated this year.
DEMOGRAPHICS:
Election 2016 is Propelled by American Economy's Failed Promises, WSJ (paywalled)
The Wall Street Journal begins a multipart series examining why promises made in 2000 about how technology, trade, and competent central banking could maintain an indefinite period of US economic growth are now seen as oversimplified and incorrect, leading to extreme reactions among voters.
CHINA:
Brexit is Helping China Push Down the Yuan, WSJ (paywalled)
As China shifts to slower growth associated with a cleaner, services-led economic model and domestic consumption, weakening the yuan as a strategic move to keep exports competitive. But a weaker currency also means capital flight--over $550 billion of outflows are anticipated this year.
Vocabulary:
Calendar, July 11-15:
Calendar, July 11-15:
- Monday: Q2 Earnings Season begins, Labor Market Conditions index
- Tuesday: Job Opening and Labor Turnover Survey (JOLTS)
- Wednesday: Import/Export Prices, Beige Book, EIA Petroleum Status
- Thursday: Jobless claims, PPI
- Friday: CPI, Retail sales, Industrial production
Weekly Predictions:
- CPI up as sustained oil prices ~$50 trickle down to consumers
- Alcoa (AA) beats earnings for third straight quarter because of ongoing demand in US autos
- One big M&A deal in financials is announced
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