Negative Real Yields and Buoyant Equities Send Mixed Signals

Relative to Covid-19, a possible Middle East conflict with Iran at the beginning of the year was met with little fanfare by Treasury markets. The 10-year Treasury yield held steady in the 1.80-1.90% range as the prospect for war was overshadowed by the signing of the...

Underweight Food and Beverage Credit

This comes after a year of extremely negative returns of -4.45% compared to -2.81% for index eligible industrials with spread widening in longer duration bonds contributing to the majority of the underperformance.

Retail Sales

While prospective data for manufacturing activity appear to have bottomed out in August and September according to readings from purchasing managers’ surveys, business activity will continue to be sensitive to headlines on trade.

Repo Stress

The rate on overnight repo surged on Monday, 9/16 and remained elevated through the week causing the federal funds rate to rise above the higher end of the Fed’s target range. This spooked market participants as short-term rates were a harbinger for worsening...