Brave New World: Most central banks working on cryptos; S&P valuations in 'nosebleed' territory

Ritesh Jain, a Dalal Street veteran, trend watcher and Global Macro Investor, captures global macro investment opportunities and economic, business and financial trends with charts and commentaries in this space.

Canadian retail disappointed, household bankruptcies rising at rapid pace & consumer credit growing at slowest pace since last oil price crash.

80 per cent of central banks are working on a digital currency: A survey conducted by the Bank for International Settlement (BIS) — found that 80% of central banks are doing some kind of work into CBDCs (central bank digital currencies). The central banks surveyed also said they are likely to issue their first CBDCs in the next few years.

S&P valuations in “Nosebleed” territory

Fed To Cap Yield in next recession- Vice Chairman Clarida
“Law of diminishing returns might also apply to QE in next recession. Yields Cap would be a cousin to QE , replacing fixed purchase amount with unlimited amount at a particular maturity peg”.

Shifting Narrative
This is a clarion call for unelected individuals participating in a body with limited transparency and limited oversight to be granted the authority to exert policies to lift up specific industries, companies and individuals, and to bring down specific industries, companies and individuals.(Ben Hunt)

Big bifurcation between Investment Grade and High Yield so far this year: AAA/AA/A/BBB up 1.8-2.8% BB/B/CCC down.

BOFA fund Manager Survey
Fund managers started 2020 with lowest cash levels in nearly a decade. Everybody is invested.

Cross Border Capital
US Fed-fuelled, liquidity-driven bull market reinforced by easing from other Central Banks: should lead to significant pick-up in World GDP by Q2 20.

“We need 10 associates to manufacture a diesel injection system, three for a gasoline system, and one for an electric motor.”

Keep your eye on the 2year treasury yield. Any further weakness and the Fed is going to start cutting again.