Using Bid to Cover Ratios to Gauge Bond Auction Strength

Interest rate and therefore bond price volatility has picked up in the past eighteen months as Central Banks have tried to rein in inflation, easy money and regain a semblance of control. With this swift move in rates since October we watch to see if the market chases lower yields with stronger bid-to-cover ratios. The bid-to-cover ratio is a simple way to measure auction strength as it balances demand and supply. In the US with debt seemingly increasing by the … Continue reading “Using Bid to Cover Ratios to Gauge Bond Auction Strength”

Global Bond Market Performance in 2023

The year 2023 will go down as one of the most traumatic and destructive bond markets on record, for the extreme moves, the money lost, the bank collapses as a result and the glaring statement it made. The statement that many Banks, Treasuries, Politicians and Central Banks have no idea what they are doing with regards to risk and money management and influence. We came from 2022, a year of slowly rising rates at year end with ZIRP in effect … Continue reading “Global Bond Market Performance in 2023”

New China Draft Rules for Online Gaming Send Chinese Stocks Sharply Lower

Chinese gaming stocks are sharply lower Friday after the Chinese government announced new draft rules for online gaming industry. Tencent’s stock fell -12.35% to HK$274, NetEase dumped -24.60% to HK$122, and Bilibili (BILI) fell around 10% on the Hong Kong Stock exchange. The stocks continued to slide heading into the US opening. Netease fell to 81.69 -22.72 (-21.76%) Pre-Market. BILI 10.32 -1.25 (-10.80%) Pre-Market. The new rules are aimed curbing the amount of money and time players spend playing the … Continue reading “New China Draft Rules for Online Gaming Send Chinese Stocks Sharply Lower”

NASDAQ 100 Special Rebalancing to Address Magnificent Seven Weighting Rule Trigger

The NASDAQ will announce rebalancing changes on July 14 for the Nasdaq 100 index, and they will take effect before the market opens on July 24. The rebalance is to address the outside dominance and risk to the index from just seven stocks dominating price. The seven stocks that have become known as the “Magnificent Seven” have dominated the NASDAQ 100 and the S&P 500 for that matter in 2023. The price moves higher in Alphabet (GOOGL), Microsoft (MSFT), Amazon … Continue reading “NASDAQ 100 Special Rebalancing to Address Magnificent Seven Weighting Rule Trigger”

Berkshire Hathaway Increases Stake to 75% of Cove Point LNG, Buys Out Dominion Energy

Berkshire Hathaway Energy (BRK.A) (BRK.B) announced on Monday it had it agreed to acquire Dominion Energy’s (D) 50% stake in the Cove Point LNG plant in Maryland in a deal valued at $3.3 Billion. Berkshire Hathaway Energy (BRK.A) (BRK.B) currently operates the facility and owns a 25% limited partner interest in Cove Point LNG, will own a 75% stake after the deal closes, with Brookfield Infrastructure Partners (BIP) holding the remaining 25% interest. Robert Blue, Dominion’s chief executive, in a … Continue reading “Berkshire Hathaway Increases Stake to 75% of Cove Point LNG, Buys Out Dominion Energy”

When Does the Bank of Japan Intervene in The Yen

With the yen weakening to levels not seen since last year, and the last time the BOJ intervened to buy yen and sell dollars the risk of intervention is back on. Japan’s top currency official has warned that the government would take action if needed in comments that follow a weakening of the yen to its lowest levels since last November. A Bank of Japan board member has hinted at the need to consider revising the yield curve control program, … Continue reading “When Does the Bank of Japan Intervene in The Yen”

The British Pound Crisis Revisited, Will There be Deja Vu?

The Bank of England raised rates 50 bps last week as the bank battles with rampant inflation and the government and MPC appear to be willing to risk sending the British economy into recession to arrest spiraling prices. There is balancing act managing a confluence of inflation, economic stagnation, and financial fragility. With that and some of the Gilt action of late there have been concerns of another crisis in confidence that could hit the pound. In September last year … Continue reading “The British Pound Crisis Revisited, Will There be Deja Vu?”

China Moves Away from US Dollar to Deals in Yuan with Russia, Saudi Arabia, Brazil and India

With the increasing angst between China and the U.S. and Chinese siding up to Russia since the Russian invasion of Ukraine we have seen more talk of moving away from the US dollar. The ‘outsider’ nations have been moving to protect themselves since the US weaponized the US dollar to impose financial sanctions on Russia after its invasion of Ukraine so as to decrease their own vulnerability to similar sanctions. China and the BRIC nations are at the forefront here. … Continue reading “China Moves Away from US Dollar to Deals in Yuan with Russia, Saudi Arabia, Brazil and India”

The Strong US Dollar Effect on the US Economy, Earnings and Rates

The U.S. dollar has pulled back significantly from highs, 2023 had been the worst start for the dollar to the year since 2018 with the interest rate forwards feeding the pullback as they price in the terminal rate for the Federal Reserve to end its most aggressive program of interest-rate increases since the 1980s. In that period, we have seen two quarters of earnings and the lower dollar impact is noticeable. The strong dollar negatively affected multinational earnings and the … Continue reading “The Strong US Dollar Effect on the US Economy, Earnings and Rates”

New Twist in Gupta $590 Billion Nickel Fraud, Reuben Brothers Sue Trafigura

The Saga whereby Trafigura Group was defrauded by around $590 million has taken another twist. Bloomberg reports, citing documents, that Trafigura one of the largest commodity traders in the world is being sued by the Reuben brothers alleging that the fraud didn’t just involve thousands of tons of missing nickel, but also counterfeit shipping documents. Hyphen Trading Ltd., owned by the Reuben brothers accuses a Singapore freight forwarding company of being involved and raises questions about Trafigura’s own actions, saying … Continue reading “New Twist in Gupta $590 Billion Nickel Fraud, Reuben Brothers Sue Trafigura”