Oct 17, 2014
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The US equity markets dipped into negative territory for 2014 this week. From the peak of September 19th to the trough this week, the S&P 500 benchmark index fell over 9%.
Royalty trusts were hit this week as oil process declined near 18 month lows. The prior warning on exploration and production master limited partnerships was based upon excessive debt. The royalty trusts with generally less debt and less in capital expenditure commitments could be, at some point, a bargain replacement for oil based master limited partnerships. The question is how low can oil and share prices go?
The premise that inflation must rise and the dollar must fall has been rendered at least temporarily false. The impact of deflation appears to correspond to lower interest rates. The pain experienced by many investors seeking a “commodity” strategy is one of the most important lessons of the decade.
30 year US Treasury Rates Make a 52 Week Low: TO ROLL OR NOT TO ROLL? The implication for investors is duration control. For Lump Sum Pension holders, the lower “GATT” rate generally corresponds to larger lump sum options.
16 countries now have lower yields than the United States. Has inflation been negated by global free flow of capital and goods?