Top of the Morning
Legendary investor and acclaimed writer Barry Ritholtz on a recent development that marks the final nail in the coffin of the bond bull market:
If you have been seeking unequivocal proof that the 30 year bull market for bonds is over, look no further than this WSJ headline: Bond-King Pimco Plans to Push ‘Alternative Funds’…To me, the fact that PIMCO is embracing alternative investments signals the end of the bond bull market. While some folks may want to blame a change in culture due to Allianz acquiring PIMCO, let me remind you that was almost 14 years ago…The loser in this are the institutional investors who have come to rely on the “bond king” for safety and security.
On the Homefront
- TSX futures are pointing to a higher open on Bay Street following yesterday’s tiny gain.
- The loonie is edging slightly lower against the greenback this morning, falling to 0.953 USD.
- At 8:30am, Statistics Canada will release the current account balance for the second quarter as well as the change to the Industrial Product Price Index in July.
- All of Canada’s Big Six banks beat the Street with their earnings reports this quarter. This morning, TD, CIBC, and RBC all posted better-than-expected earnings per share to round out a spectacular earnings season. The ‘short Canada’ trade that was in vogue six months ago appears to have passed its expiration date.
- Bullion took a slight hit overnight, and is currently hovering around 1,415 USD/oz. Gold miners have underperformed the shiny metal by a fair margin over each of the past two sessions.
- The first revision of U.S. Q2 GDP growth comes at 8:30am, with the initial reading of 1.7 percent quarter-over-quarter growth expected to be revised higher.
- Last week’s initial jobless claims in the U.S. will also be released at 8:30am in tandem with the revised GDP figure.
- 7,000 Germans were added to the unemployment rolls after two months in which joblessness decreased.
- Bundesbank President Weidmann speaks on monetary policy midday in Hamburg. There has been quite a bit of anti-Greek rhetoric from German senior officials in the run-up to September’s elections, highlighted by Angela Merkel’s declaration that Greece should not have been allowed to enter the E.U. at the time of its admission.
- Japan releases a plethora of economic data tonight, the latest update on the efficacy of Abenomics. The island nation’s Manufacturing PMI for August, as well as past data on inflation, unemployment, and household spending are slated to be announced starting at 7:15pm.