Cash, Bonds, Rates And Yields Are All Still Sending Nervous Signals

Bernanke If you asked the person in the street, 'Why are interest rates so low?', he or she would likely answer that the Fed is keeping them low. Interest rates are determined by a wide range of economic factors - not by the Fed. - Ben Bernanke, March 2015
Here's the score this far: Person in the street: 8, Ben Bernanke: 0...

Fed While the Fed is projecting 4 more 25 bps hikes over the next year, the market is currently pricing in only 3 (December 2018, March 2019, September 2019).

Auction We wrote about the US Treasury issuing debt (IEF, GOVT, SCHR, VGIT, TIP) at record pace in November.
Following a relatively weak auction of 3-year Treasuries yesterday, yields on the debt have risen to a new post-crisis high.

Speaking of auctions...
Sotheby's (BID) hit a 52-week low, down 35% from its June high.

The ratio of Sotheby's to Consumer Staples (XLP) tells an interesting story about risk appetite over time.

Cash Cash (JPST) is on pace for its best yearly return since 2007.

Short-Term Short-term US Treasury (BIL, SHV, SHY, VGSH, SCHO, STIP) yields hit their highest levels in over 10 years:
1-month: 2.20% 3-month: 2.36% 6-month: 2.51% 1-year: 2.71%
Corporate Bonds US credit markets (AGG, BND, LQD, BSV, TIP, VCSH, VCIT, SHV, EMB, SHY) are still showing signs of a risk-off mood, despite positive returns so far in November.
The lowest-rated bonds (HYG, JNK, AWF, BKLN) continue to... Read more