Jun 22, 2022
Searching for ways to better understand the fixed income space or looking for actionable ideas in this asset class? Bespoke’s Fixed Income Weekly provides an update on rates and credit every Wednesday. We start off with a fresh piece of analysis driven by what’s in the headlines or driving the market in a given week. We then provide charts of how US Treasury futures and rates are trading, before moving on to a summary of recent fixed income ETF performance, short-term interest rates including money market funds, and a trade idea. We summarize changes and recent developments for a variety of yield curves (UST, bund, Eurodollar, US breakeven inflation and Bespoke’s Global Yield Curve) before finishing with a review of recent UST yield curve changes, spread changes for major credit products and international bonds, and 1 year return profiles for a cross section of the fixed income world.
In this week’s report we discuss the decline in market pricing of the Fed’s terminal rate from over 4% to just above 3.5%.
Our Fixed Income Weekly helps investors stay on top of fixed income markets and gain new perspective on the developments in interest rates. You can sign up for a Bespoke research trial below to see this week’s report and everything else Bespoke publishes free for the next two weeks!
Click here and start a 14-day free trial to Bespoke Institutional to see our newest Fixed Income Weekly now!
Jun 19, 2022
Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read over the past week. The links are mostly market related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.
While you’re here, join Bespoke Premium with a 30-day free trial!
Recession Watch
Housing Market Update: Share of Homes with Price Drops Reaches New High as Mortgage Rates Top 2008 Levels by Tim Ellis (Redfin)
Demand is cratering across the housing market per Redfin data measuring everything from buyer traffic to price cuts to pending sales indicating that surging mortgage rates have buried the housing market. [Link]
It’s hip to be bear: Business leaders join chorus of economic doomsayers by Jason Kirby (The Globe And Mail)
Prognosticators, pundits, strategists, fund managers, and all manner of other market participants are leaning heavily into a negative outlook for stock markets reeling amidst massive global monetary policy tightening and soaring interest rates. [Link; soft paywall]
Hedge Funds
JPMorgan Packed Its Wealthy Clients Into Tiger Global Fund for Private Bets by Sridhar Natarajan, Hema Parmar and Miles Weiss (The Wealth Advisor/Bloomberg)
The most recent fund offered by collapsing hedge fund complex Tiger Global was stuffed full of investments from JPMorgan customers; total investments in Tiger and another similar fund a few months earlier neared $5bn just before the funds cratered. [Link]
Hedge Fund Selling Was Never More Furious Than in Last Two Days by Lu Wang and Melissa Karsh (Yahoo!/Bloomberg)
Goldman Sachs prime brokerage clients in the equity hedge fund space liquidated more equity exposure over two days in the past week than at any point since 2008. The good news, we suppose, is that this kind of liquidation event is often the sort of even that tags market lows rather than the other way around. [Link]
Prices
Why Gas Prices Are So High by Ella Koeze and Clifford Krauss (NYT)
High crude prices and insufficient new production are the most important driver of the surge in prices at the pump that consumers are suffering through this summer. [Link; soft paywall]
Cruise-Line Pricing Is Lost at Sea by Laura Forman (WSJ)
Eye-watering hotel prices are making seaborne trips a lot more attractive, with room rates roughly 10% below what’s on offer from mid-scale hotels. The industry’s rebound might be dependent on consumers biting at the bargain. [Link; paywall]
Plague & Pestilence
Ancient DNA solves mystery over origin of medieval Black Death by Willy Dunham (Reuters)
The discovery of bubonic plague victims who died in 1338 or 1339 are the earliest ever documented from the Black Death pandemic, all but confirming the plague originated in Central Asia and spread to Europe and the rest of Asia via trade routes. [Link]
New Tools Can Make Our Covid Immunity Even Stronger by Deepta Bhattacharya (NYT)
A recap of the new technologies which have boosted COVID immunity, and a proposal for maximizing population immunity long-term, including deploying vaccines through the mouth or nose instead of via a shot. [Link; paywall]
Single beaver caused mass internet, cell service outages in Northern B.C. by Kaitlyn Bailey (CTV)
One pesky beaver got a little bit too interested in the wrong aspen tree and ended up cutting a large swathe of British Columbia off from the internet in the process. [Link]
Crypto
What were all those 6,200 Coinbasers doing anyway? by Alexandra Scaggs (FTAV)
An investigation into the downright perplexing personnel decisions of one of the world’s largest crypto exchanges. [Link; registration required]
Crypto Hedge Fund Three Arrows Capital Considers Asset Sales, Bailout by Serena Ng (WSJ)
One of the largest pools of crypto investment capital has seen positions blown up a scramble for liquidity amidst brutal market conditions across the blockchain. [Link; paywall]
Marriage
Marry Your Like: Assortative Mating and Income Inequality by Jeremy Greenwood, Nezih Guner, Georgi Kocharkov, and Cezar Santos (NBER)
An estimate that assortative mating (that is, marriages that pair people with similar incomes and socioeconomic backgrounds) was responsible for much of the increase in US income inequality over the past half century. [Link; 26 page PDF]
Read Bespoke’s most actionable market research by joining Bespoke Premium today! Get started here.
Have a great weekend!
Jun 15, 2022
Searching for ways to better understand the fixed income space or looking for actionable ideas in this asset class? Bespoke’s Fixed Income Weekly provides an update on rates and credit every Wednesday. We start off with a fresh piece of analysis driven by what’s in the headlines or driving the market in a given week. We then provide charts of how US Treasury futures and rates are trading, before moving on to a summary of recent fixed income ETF performance, short-term interest rates including money market funds, and a trade idea. We summarize changes and recent developments for a variety of yield curves (UST, bund, Eurodollar, US breakeven inflation and Bespoke’s Global Yield Curve) before finishing with a review of recent UST yield curve changes, spread changes for major credit products and international bonds, and 1 year return profiles for a cross section of the fixed income world.
In this week’s report we review catastrophic wealth destruction from the current bond and stock bear markets.
Our Fixed Income Weekly helps investors stay on top of fixed income markets and gain new perspective on the developments in interest rates. You can sign up for a Bespoke research trial below to see this week’s report and everything else Bespoke publishes free for the next two weeks!
Click here and start a 14-day free trial to Bespoke Institutional to see our newest Fixed Income Weekly now!
Jun 12, 2022
Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read over the past week. The links are mostly market related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.
While you’re here, join Bespoke Premium with a 30-day free trial!
Work
Microsoft says it will not enforce non-compete clauses in U.S. employee agreements by Akash Sriram (Reuters)
Microsoft will do away with noncompete clauses in the contracts of all but the most senior executives in the wake of research showing that noncompetes serve to suppress employee pay. The software giant also signaled it would “not resist” unionization efforts by employees. [Link]
A Full Return to the Office? Does ‘Never’ Work for You? by Emma Goldberg (NYT)
After spending two years taking care of all their responsibilities without leaving their homes, white-collar workers are calling management’s bluff when it comes to full-time returns to the office. [Link; soft paywall]
Who Killed the Phillips Curve? A Murder Mystery by David Ratner and Jae Sim (FEDS Notes)
The authors argue that labor market policies rather than aggressive monetary policy defenses of inflation targets have led to a disconnect between the unemployment rate and inflation. [Link; 36 page PDF]
Texas Tea
The world must brace itself for a further surge in oil prices by David Sheppard (FT)
Oil is continuing to rip as price forecasts soar amidst solid demand and no hope of any relief for the tight supply of crude around the world. [Link; paywall]
The Option To Write Options – A Suggestion For SPR Rulemaking by Skanda Amarnath, Arnab Datta, and Alex Williams (Employ America)
A change in Department of Energy administrative rules offers the opportunity to intervene more intensively in the oil market in order to make sure producers have confidence in a long-term floor for prices that will incentivize capex. [Link]
Violence
Rural America Reels From Violent Crime. ‘People Lost Their Ever-Lovin’ Minds.’ By Dan Frosch, Kris Maher, and Zusha Elinson (WSJ)
While cities have gotten most of the attention for recent increases in violent crime off of record lows, murders and other forms of violent crime are also soaring in rural areas across the country, suggesting common narratives for the causes that are unique to cities are likely misplaced. [Link; paywall]
Rent
Manhattan landlords are rejecting single tenants who don’t make over 160k by Tiffany Ap (Quartz)
A one bedroom apartment in Manhattan carries a median asking rent of $4k per month, meaning that with the standard margin of safety for landlords nobody making under $160k per year can rent the median apartment on the market in the city. [Link]
Tech
How AI Could Help Predict—and Avoid—Sports Injuries, Boost Performance by Eric Niiler (WSJ)
Very precise measurements of individual players’ joints are nearing the level of accuracy that could allow real-time prevention and prophylaxis against serious player injury. [Link; paywall]
Ukraine
Low, Fast And Dangerous: A Firsthand Account Of Ukraine’s Secret Helicopter Rescue Missions by Howard Altman (The Warzone)
An incredible oral history of helicopter flights that served to resupply and evacuate Ukrainian troops pinned down for a month at Mariupol’s giant Azovstal steel plant. [Link]
Demographics
Could China’s population start falling? by Xiujian Peng (BBC)
Years of suppressing birth rates in China has taken birth rates from 2.6 35 years ago to a 1.15 in 2021, lower than the US or Japan and so weak that the Chinese population will almost certainly start shrinking over the next year or so. [Link]
Investing
Highflying Tiger Global Humbled by Unraveling of Giant Tech Bet by Eliot Brown and Juliet Chung (WSJ)
One of the biggest winners of the post-global financial crisis boom in the technology industry was the monster Tiger Global complex. In 2022, though, the massive hedge fund is struggling with a legendary string of losses. [Link; paywall]
Read Bespoke’s most actionable market research by joining Bespoke Premium today! Get started here.
Have a great weekend!
