AI‑savvy Firms Drive M&A Surge Amid Volume Slump
M&A is surging this yr, but it’s very specific activity. From RBC’s Vito Sperduto: "The U.S. market is up 43% YTD, but deal volume is down 30%. This isn't just a rebound; it's a consolidation of power by those who can close the 'AI Valuation Gap' now." From Apollo’s Torsten Slok: https://t.co/1bPpqp2B38
Oil Inventories Near Record Lows Despite Potential Hormuz Reopening
The world’s oil buffers are rapidly being depleted, with crude inventories poised to reach the lowest levels on record even if the Strait of Hormuz reopens in full by the end of this month: GS’s Daan Struyven & team https://t.co/Z3i0GtxRlv
Banks Fill Private Credit Gap as Loans Surge 7.4%
Commercial and industrial loans made by banks are up 7.4% year-over-year, the biggest jump in three years: @PantheonMacro While this can indicate a pickup in capex spending, this time it shows how banks are taking the place of private credit...
US Travel Remains Strong; International Airlines Pose Biggest Threat
Two takeaways from this interview w/United’s Kirby: 1) the US economy is surprisingly strong & higher prices aren’t deterring travelers; 2) he views the big competition as international airlines, not domestic ones when considering potential acquisitions https://t.co/TbARpnEJzJ
HSBC Warns: Market Dips Are Quick‑play Opportunities
HSBC's Kettner: "'This doesn't make sense' and 'Risk assets are detached from reality.' This is how a lot of our meetings start right now...But these are exactly the sorts of dips one will have to use very quickly in the...
Tech Split: Chips Surge While Software Stalls
There’s unprecedented divergence between the haves and the have nots in tech: semiconductors are booming, software is lagging.
CEOs Doubt AI ROI While Study Warns Job Threats
There's a dissonance between big CEOs, who aren't willing or able to predict any kind of ROI from using AI, and papers like this one. This OpenAI paper says that 18% of jobs are at high automation risk, & 24%...
Corporate Profits Outpace Growth, Workers' Share Plummets
"US corporate profits have been growing faster than the domestic economy since the year 2000. The relationship between the two sits at/near record highs:" @DataTrekMB Meanwhile, "American workers’ share of economic activity has been declining rapidly over the same timeframe"...
Powell's Exit Odds Slip, Warsh's Confirmation Odds Hit Record Low
The odds of Fed Chair Jay Powell leaving the Fed's board by May 30 have fallen to 31%, according to Polymarket. The chances of Kevin Warsh getting confirmed to be the next Fed chair by May 15 have fallen to...
Imported Inflation via Energy and Food Remains Top Risk
“The biggest risk continues to be that inflation gets imported around the world,” first through energy, then to food & beyond: MS’s Ted Pick. Otherwise, markets will stay strong with even a “narrowing of the cone of uncertainty” around the...
UK 10‑Year Bond Draws Record Demand, Yields Spike
The good news for the UK: the country had record amounts of investor demand for a 10-year bond offering. The bad news: they had to offer a high premium, selling the debt at the highest yield since 2008 at 4.9%....
HSBC's Kettner Stays Bullish Despite Modest News
HSBC's Max Kettner is still bullish: "We don't need a full return to normality in order to fade the moves of the last 6 weeks. Given our positioning framework is still sending the most bullish signal for risk assets since...
Trust in Valuations, Not Liquidity, Drives Private Credit Pressure
The issue for private credit is not just liquidity but a lack of trust in how fund managers value loans. "Redemption gating isn't likely to stop the pressure on private credit until private credit managers take more meaningful & more...
Global Debt Spikes 33%, Crippling Downturn Response
“This is the worst place we’ve been in 20 years,” or probably “longer than that,” for communal capacity to combat a widespread downturn: Harvard economist Carmen Reinhart. Global debt has surged by one third in the past 6 years, to...
US Consumer Confidence Hits Record Low, Employment Near 2008 Lows
Not only did US consumer confidence fall to a record low in the latest UMich survey, but the employment component deteriorated to 41 from 52, just 1 pt from matching the lowest since 2008, via @pboockvar https://t.co/lACAKTyttL https://t.co/gblJzEGApU
Fed's 2% Target Deemed Myth; No Near-Term Hikes
JPMorgan’s Bob Michele went on to say that the Fed’s 2% target is increasingly a “myth,” and that US central bankers are tacitly accepting a higher rate as acceptable. So even if inflation stays sticky, he doesn’t see rate hikes...
Hiring Slows as Service Orders Surge to Three‑year High
There are signs that businesses are increasingly reluctant to hire right now, even amid robust consumer spending. The employment component of today's ISM Services data came in at the weakest since 2023, even as new orders picked up to the...
Bond Traders Show Minimal Bearishness Ahead of Jobs Report
Bond traders are the least bearish in 10 years ahead of tomorrow’s jobs report: BMO survey. Just 24% of respondents saw the next 15 bp move in 10-year yields as being higher, the lowest since Nov. 2010. Most see the...
Brent to Hold $113/Barrel in Q2 Despite Conflict Pause
Ryan Sweet of @OxfordEconomics sees brent crude $113 a barrel on average for Q2, even with a potential near-term end to military action. "The military timeline differs from the economic one. The Strait of Hormuz is still effectively closed, &...
US Economic Surprise Index Peaks, Analysts Underestimated Momentum
The Bloomberg US Economic Surprise Index is bumping up against the highest levels since late 2023. Analysts seem to have underestimated how much momentum there was in the economy heading into the Iran war. https://t.co/qXTzGuZtlX
Hiring Hits 10-Year Low, Labor Market Paralysis Deepens
Today’s JOLTS data highlighted the extent of the labor market paralysis that was already deepening before the Iran war. Hiring made a new 10+ year low in February excluding pandemic distortions, via @bespokeinvest https://t.co/xYctvNLqUZ
Foreign Central Banks Slash Treasury Holdings to 2012 Low
Foreign central banks have cut their holdings of Treasuries at the New York Fed to the lowest level since 2012. The selling has come as oil importers like Turkey, Thailand and India raise cash through asset sales to prop up...
Shanghai‑Dubai Airfreight Rates Near Pandemic Record
Airfreight rates from Shanghai to Dubai have soared 95% since the start of the war, to $8.60. Rates could exceed the 2020 pandemic record of $9.40 if fuel surcharges continue to rise: Drewry Airfreight Insight https://t.co/ge5NQvbHky
Diesel Prices, Not Gas, Threaten US Inflation Surge
The bigger concern for the US economy isn't gas prices, but diesel prices, as @amoshochstein tells @annmarie just now. They're at the highest since 2022 and bumping up against those highs, at $5.45 a gallon. That's the price that'll pressure...
March Market Turmoil: Dollar Rises,
In March: - US dollar set for best month since 2024, bond yields poised for largest monthly rise since 2024 - S&P poised for biggest monthly drop since 2022 -Brent crude set for its biggest ever monthly gain - Average US gas prices are...
Earnings Cycle Accelerates Despite S&P 500 Drop
"The S&P 500 index is down 9.2% from its recent highs, and the P/E ratio is down 18%. That 9 percentage point difference can be explained by an earnings cycle that is not only holding up but accelerating higher:" Fidelity's...
Banks Triple PE Lending, Funds Now Highly Leveraged
Banks have tripled lending to private equity and credit since 2018 to over $300 billion. As a result, funds that invest in highly leveraged companies have themselves become leveraged. https://t.co/HbKAJUCFch https://t.co/RAeUMBVcKG
US Yield Spike Driven by Term Premia, Not Inflation
The move higher in US yields has been entirely driven by term premia, not inflation expectations. Real yields on 10-year bonds are the highest in almost a year. The implication seems to be that investors are worried about the fiscal...
Russia's Oil Profits Surge; Carmakers Forced to Source Russian Aluminum
Russia is earning the most from its oil exports since the 2022 Ukraine invasion. https://t.co/71t01Q9mI9 Meanwhile some carmakers are considering buying aluminum from Russia. “We don’t really want to take supplies from Russia but we have no choice” https://t.co/fzAXIO4N0x
2‑Year Treasury Auction Weakest Since May 2024
“Today’s 2 yr auction was terrible:” @pboockvar The bid-to-cover ratio was the weakest since May 2024 and dealers got stuck with the largest amount since October 2022. Traders are having a hard time pricing Fed policy as oil prices swing...
Iran May Keep Attacks Despite Trump Pause, Says RBC
There's no easy off ramp right now. RBC's Helima Croft: "We think there may be too much emphasis on the 'TACO' trade, as Iran could continue attacks, even if President Trump seeks to call time, to restore a measure of...
US Gas Prices Jump 37%, Reach 2022 High
Average US gasoline prices have surged 37% since the January lows, rising to the highest since 2022. The absolute price level, $3.88, is still within the range of normal from a historical perspective. But it's rising at an rapid clip,...
Core Producer Prices Surge, Fed Rate Cuts Unlikely
US producer price inflation ex-food and energy came in at the fastest pace since January 2025 for the month of February, before the oil price shock. It's going to be very hard for this Fed to signal rate cuts ahead...
Own AI Stocks, Not Bonds, Says Howard Marks
Oaktree's Howard Marks says investors are probably better off buying stock in AI-focused companies rather than lending them money. “If you’re taking fundamental business model risk, shouldn’t you get paid for it by being an owner rather than a fixed-income...
Credit Markets Tighten as Qualtrics Loan Stalls
While credit markets are open to many companies, they're starting to close for others. Qualtrics, which makes online survey tools, had to ice a $5.3 billion loan and bond deal due to lack of investor appetite. https://t.co/DE0BfMnHYT
Fund Managers Boost Cash to Pandemic-High Levels
In BofA's latest fund manager survey, cash levels jumped from 3.4% last month to 4.3% in March, the biggest increase since the pandemic.
Direct Lending Defaults to Hit 8% Amid AI, Leverage
Default rates in direct lending will climb to 8% amid AI disruption, high leverage and looming maturity walls within the software sector: Morgan Stanley. https://t.co/9GeL184Hjd
Oil Shock Drives French Bond Yields to 2011 High
The oil-price shock is taking a bigger toll on European markets, particularly in fixed income, making the ECB's meeting this week arguably more interesting than the Fed's. Yields on French 10-year bonds are back up to the highest since 2011....
Morgan Stanley Lifts Q2/Q3 Oil Forecasts Amid Supply Gap
Morgan Stanley's Martijn Rats raised his oil-price forecast for Q2 to $110 a barrel, up from $80 previously. For Q3, he now sees $90 a barrel, up from $70. Even a reopening of the strait in the short term would...
Russia Gains $150 Million Daily From Oil After Hormuz Closure
Russia is earning as much as $150 million a day in extra budget revenues from its oil sales after the effective closure of the Strait of Hormuz. https://t.co/cfFgUkBWrB
Oil and Commodities Set to Rise Despite Iran War Outcome
Carlyle's Jeff Currie lays out a case for why oil and other commodity prices are heading higher, regardless of the exact outcome of the war in Iran. https://t.co/tMKWpSXhYe
JPMorgan's Loan Write‑downs Expose Private Credit Valuation Fragility
JPMorgan is marking down the value of some software-related loans in private credit portfolios. This highlights how fungible private loan valuations have become at a time of little liquidity, and raises questions about which firms are doing a better job...
Oil Shock Risk‑off Still Incomplete, Metrics Lag
"Historical risk-off moves after an oil shock have generally required at least one of: Large and sustained oil price spike...Hawkish policy response...Broader macro damage:" Deutsche Bank. We're "closer than a week ago, but on several metrics we aren’t quite there...
Oil Prices Hit $100, Crisis Likely Deepens
"This may be a war but it's also perhaps the biggest energy supply/logistics crisis we've ever seen in modern history:" Mizuho's Jordan Rochester. "Oil is now on a $100pb handle and it might be there to stay," with greater likelihood...
Citi Advises Holding Off Equities Amid Soaring Oil
“We see no reason to actively add equity exposure at this time as risk/reward will improve from either price action or a path to de-escaltion forming:” Citi’s Kaiser. The oil VIX reached its highest level other than during COVID since...
Long-Term Inflation Expectations Hit April Low, Treasury Yields Diverge
Long-term inflation expectations have fallen to the lowest since April, based on 5-year 5-year forward breakeven rates. Yields on 10-year Treasuries seem to be trading on a different dynamic. https://t.co/hStpU22gbY
Hormuz Strait Closure Halts Major Global Oil Flow
The Straight of Hormuz, which is a key shipping lane for the world's oil, fertilizer and other products, is effectively shut. Charts from @bloomberg: https://t.co/zunbN3eO7G
Dimon Warns Inflation May Spark Economic Downturn
“Right now, the economy is doing fine, asset prices are high…I think the probabilities of something going south are more than other people think..I think inflation will cause the economic downturn:” JPMorgan’s Jamie Dimon https://t.co/xB4HN6ITSk
Security Premium Drives Higher Energy Prices
“Energy prices need to reflect a security premium….Every commodity that must cross a border will carry the cost of the oldest lesson in political economy: security comes first:” Carlyle’s James Stavridis & Jeff Currie https://t.co/wIF8jevdyM
Treasury Yields Hit Year Low as Credit Spreads Surge
Something is happening in bond markets. Yields on 10-year Treasuries have fallen to the lowest this year, while credit spreads are widening to the highest this year.