Why have Canadian bond yields risen in the month of May? Well, US yields have also risen, and the two securities track each other closely. Why have US yields risen? It seems that investors are having a taper tantrum, which has suppressed the go-go stock market during the last week or so. The US 10 year has been range bound between 1.4-2.3% since the summer of 2011. If yields breakout above 2.3% and remain there for a few days, then you might have a trend. Until then, let’s call this noise and move on.
The standard Bloomberg article encouraging people to buy more stocks starts like this:
Economic statistic X rose in the latest (week, month, quarter) indicating that (insert optimistic prediction here).
Here is the first line of this article:
China’s manufacturing unexpectedly accelerated in May, indicating a slowdown in economic growth in the first quarter may be stabilizing.
Don’t believe the hype. China has two institutions computing its PMI. The official PMI issued from a quasi-governmental agency shows stagnation, but the independent HSBC-Markit PMI shows contraction. Despite Bloomberg’s hopey headline, Chinese manufacturing has hit a rough patch.
The various predictors of stock market performance all suffer from the same flaw. As soon as an anomaly is noticed, speculators begin taking advantage of it through arbitrage. Then, the anomaly disappears. Even if this omen proves to be prescient, Turbo Tuesdays will save us all.
Istanbul is to Turkey as New York City is to Bible Belt. The entire country is a Koran Belt with a few cosmopolitan pockets. The protest is about the proposed razing of Tahir Square. This is a central square in Istanbul where the people meet and sometimes protest. The Turkish Prime Minister is attempting to consolidate power by eliminating a key rallying point for the opposition.
It’s a shame that the secular democracy built by Ataturk is being torn asunder by Erdogan’s populist, Islamist party.