To those who were expecting rising bond yields by now, you’re in good company. The fits and starts in economic growth has primary dealers grasping at straws for the moment, as Lisa Abramowicz and Daniel Kruger report today.
Inconsistent growth in the U.S. labor market and in China’s economy, threats posed by the crisis in Ukraine, and Yellen’s all-thumbs approach to telegraphing the Fed’s intent with rates -- six months, two years, whatever -- have caught dealers short.
“You have an uncertain Fed, an uncertain direction of the economy and you’ve got rates moving,” Mark MacQueen, a partner at Sage Advisory Services Ltd., tells our reporters. “Calling the direction of the market and what you should be doing in it was a lot easier than it is today, particularly for the dealers.”
Basel’s restrictions haven’t helped either, leaving banks with little more than government debt to work with. At least one primary dealer is sticking with its forecast. Deutsche Bank’s chief U.S. economist, Joseph LaVorgna, predicts a yield of 4 percent on the 10-year by year-end.
Last week we wondered about Ken Moelis’s sense of timing for his investment bank’s initial public offering, given the sour mood markets have been in lately when it comes to IPO pricings, and today we get the math. Leslie Picker and Mohammed Hadi produced a chart of the day showing how rising supply of new issues combined with some recent selloffs, especially in technology shares, are making the timing akin to throwing a ball through a swinging tire.
A light day for data. The leading economic indicators index comes out at 10 a.m. New York time. Earnings of note include Netflix and Zions Bancorp.
Barclays is next to quit commodities, the Financial Times reports today. An announcement is expected tomorrow that the bank will wind down “large parts” of its metals, agricultural and energy trading businesses. The FT says Jenkins is preparing thousands of job cuts in a plan to quarantine operations that don’t cover their costs in a so-called bad bank.
Things to catch up on:
+ The truce reached last week between Russia and Ukraine, with participation from Europe and the U.S., lasted a few hours. With skirmishes and scattered casualties over the weekend, and with Russian forces now becoming identified among Ukrainian “separatists,” the likelihood of a civil war in Ukraine’s east grows more plausible. Biden is scheduled to arrive in Ukraine today.
+ Whatever you see behind the Obama administration’s delay, again, of a decision on the Keystone pipeline, it’s unlikely it has anything to do with the benefit gained by waiting until after the November elections or anything to do with politics. We learned this from Debbie Wasserman Schultz, chairwoman of the Democratic National Committee, on “Meet the Press” yesterday.
+ Bodies from the South Korean ferry disaster are starting to accumulate. As of this morning, 64 had been recovered, with 174 of the 476 aboard saved when it sank April 16. The ferry’s captain and six crew members, one of whom was piloting the vessel for the first time in known rough water, have been arrested.
+ Rubin Carter died yesterday in Toronto from prostate cancer at age 76. The New Jersey-born boxer known as Hurricane Carter spent 19 years in prison after being wrongly convicted of murder, and whenever Bob Dylan’s sneering, sarcastic narration of the event, “Hurricane,” comes over the radio, we wonder about others serving time for things they didn’t do.
+ This time a stricken Malaysia Airlines jetliner made it to the ground safely.
In yesterday’s NHL playoff results, Montreal has a 3-0 lead in its first-round playoff series with Tampa Bay after a 3-2 win, while San Jose has gone up 2-0 in its series with Los Angeles with a 7-2 effort. Boston and Philadelphia evened their series at one game apiece with victories yesterday.
In the NBA over the weekend, playoff series openers were won by San Antonio, Portland, Golden State and Oklahoma City in the Western Conference. In the East, Atlanta, Washington, Brooklyn and Miami all posted wins.
There’s an old superstition in theater during the run of a show: You don’t cross the curtain line. If you need to go from the stage out into the house, as the audience seating is called, you go around that fourth wall created by the stage opening and through an exit off to the side.
While a loose analogy, it resonates when contemplating those tens of thousands who have summoned the courage to train for this year’s Boston Marathon, some of them on the very streets of the racecourse leading up to -- BUT NOT OVER -- the finish line. Too sacred, especially this year.
Without getting into too much background, we have some experience with marathon training. Although we’ve never run one, we’re close to someone who has. The broken bones, torn muscles and ligaments, concussions, exhaustion and delirium we suffered in the various sports we played in our younger days were nothing, nothing at all, compared to what marathon runners face. Because this is an unnatural act.
First, and ironically -- considering that, at the big marathons, you’re surrounded by thousands of other runners and thousands more spectators -- in every minute leading to that moment, you are alone. If you’re training for Boston: cold, dark and alone.
You’re training in winter, which is fine if you live in Phoenix and different, and more cruel, if you live in Philadelphia. If you’re aiming for the New York Marathon in November, you’re training in the summer. Which is fine if you live in Newfoundland, not so much if you’re in Atlanta.
Wiped out after a long day? Suck it up. You have miles to log. Either you log them before work or after work, but there’s no escaping them. They haunt you like hungry children. It’s 10 degrees Fahrenheit outside, it snowed again overnight, the roads are caked with ice, it’s dark at 4:30 in the morning and at 4:30 in the afternoon, and the wind seems to know which direction to blow against. Too bad. To sleep in is to fail.
You screw your courage to the sticking place. All the doubts, all the fear, all the nagging aches and pains -- especially those that will inevitably arise about a week or two before the marathon -- these must be ignored, or at least reasoned with.
Want to hire someone, or go into business with them? Choose a marathon runner. Because short of something like landing at Omaha Beach, you don’t know courage or determination until you’re at mile 16 with spasms in your ribcage, you’re pretty sure a second toenail detached around mile 14, you should have gulped down more water back at mile 13, your legs are starting to use curse words you haven’t even learned yet, and there’s a large hill coming up ahead and a larger one after that one.
Now, imagine you have done all this preparation only to arrive for the event at the site of a terrorist attack, a known crime scene where, last year, you were the intended target.
Police can’t be everywhere, the cameras can’t see everything, the window of opportunity to get you where you escaped last year stretches for 26.2 miles, and this is already the hardest day of your life. Or, your year, for those idiotic enough to run one of these things more than once.
Where does this courage come from in us? Not just in those running, but those men and women in blue who will place themselves right in last year’s blast zone and dare someone, anyone, to try it again. Or those long-suffering members of the support crew -- wives and husbands, children and colleagues -- who also will turn their back on fear and place themselves in harm’s way just for the sake of love?
How is it that we fight, and try and fail and fight some more, for those things that make us human and, on days like this one, a little more than human?
We shall see for ourselves at about 9:30 a.m. in Boston, where once upon a time, not too far from the starting line, a courageous city looked tyranny in the eye and, just like today, punched it in its [EXPLETIVE DELETED] throat.