IVOL News and Press, Quadratic Interest Rate Volatility and Inflation Hedge From 11/01/20

We're now only a few days from the most pivotal of elections. COVID cases here at home remained highly elevated all summer. And if U.S. infections now follow Europe's trajectory, our nation is facing a dark and challenging winter. The Fed could well be on the cusp of a historic pr...

European bond prices have an unmistakable correlation to European COVID infections. The strategy of ensuring the banking system remains well capitalized - while letting market-based finance run wild - may have plausible theoretical underpinnings. The "penalty rate" issue is key to...

There are continuing political and pandemic stories that could dominate the news cycle at any time. Many of the normal economic indicators are not helpful in the wake of the COVID lockdown decline. Retail sales improved 1.9% in September, beating expectations of a 0.6% gain and Au...

The AIER Everyday Price Index rose 0.2 percent for the month of September, faster than the 0.1 percent rise in the Consumer Price Index (on a not seasonally adjusted basis). The largest positive contributors to the rise in the index in September were intracity transportation, food awa...

The inherent problem of tying your Presidency to the stock market is that it's all fine until it isn't. The market rallied on what is for now "hope" of more stimulus. There is still no deal on Capitol Hill, and the parties are still far apart primarily on funding for states and munici...

At least for now, for the markets it's weirder the better. With Biden's lead appearing increasingly insurmountable (with less than four weeks to go), we can assume there was this week significant buying associated with the partial reversal of market hedges. Chairman Powell made hi...

It doesn't take much to set reflation expectations on fire these days. With US interest rates near zero (or negative in some parts of the world), a mild uptick in yields inspires a new round of forecasts that a sustained run of higher inflation has finally started. The immediate c...

Some earnings and revenue growth data was going to be added on the Financial sector, but given the drop in the 10-year Treasury this morning, with the 10-year Treasury yield now at 74 bps, a post dedicated to worries about rising interest rates made more sense. A steepening yield curv...

There seem to be too many different types of risks developing around the Presidential election. Personally, I still think Financials in general and bank stocks in particular are more "value" than "value trap" but more patience will be required. It's another dry week for S&P 50...

U.S. election is just one of the three forces driving financial markets. Debunking the notion that a GOP administration is better for financial markets than a Democratic government. What a Trump or Biden win could mean for equities, fixed income and real assets. For further ...