Tuesday November 22 20916 Housing and Economic stories

TOP STORIES:

"Is The Market Wrong?": Financial Conditions Are Tightening At An Alarming Pace - (www.zerohedge.com) As a result of the recent spike in yields, and surge in the dollar following the Trump victory, the market's reaction has been to assume that this is a harbinger of rising inflation due to a tidal wave of "imminent" fiscal easing, and has accordingly pushed up the December rate hike odds to above 90%. After all, the logical offset of the expected easing in fiscal conditions is for the Fed to tighten monetary policy, arguably the only source of market gains (and economy support) over the past 7 years (a good read on "monetary offsets" can be found here). But is the market wrong? After all, just today the BIS issued a warning that the stronger dollar - far from an "all clear" signal of confidence in the economy, may simply signal far greater financial system risk as a result of a substantial global dollar funding shorage.

Renegade Facebook employees form task force to battle fake news – (www.cnbc.com)  In the wake of Trump's victory, Facebook has been facing questions over its responsibility in spreading misinformation or failing to clamp down on the sharing of fake news. Almost half of adult Americans rely on Facebook as a source of news, a recent study by the Pew Research Center found. A recent report by BuzzFeed News found that the three large left-wing pages published false or misleading information in nearly 20% of posts, while the three big right-wing Facebook pages published it 38% of the time.'

Selloff in Bonds, Emerging-Market Assets Deepens as Dollar Gains - (www.bloomberg.com) Routs in bonds and emerging-market assets intensified, while the dollar continued to strengthen as investors positioned for the wave of U.S. fiscal stimulus that President-elect Donald Trump has pledged to unleash. Yields on 30-year Treasuries rose to the highest level since January, with last week’s record debt selloff bleeding into Monday amid losses from Asia to Europe. The Bloomberg Dollar Spot Index climbed to a nine-month high, with the greenback gaining against most major peers. U.S. stocks took a breather as a gauge of shares in developing nations sank to a four-month low. Copper climbed with nickel, while crude oil fell with gold.

Texas Now Has As Many Oil Rigs As Rest Of The Country Combined - (www.dailycaller.com) The majority of new oil and natural gas drilling in the U.S. is happening in Texas, according to a report published Tuesday by the federal Energy Information Administration (EIA). American oil and gas drilling is increasingly concentrated in the Permian Basin, which spans parts of western Texas and southeastern New Mexico. The Permian now has nearly as many active oil rigs as the rest of the U.S. combined, according to an EIA report. Oil production in the region has spiked drastically since early 2015, while production in other areas has fallen due to low oil prices. Permian oil is relatively cheap to access and refine since it’s close to most American refineries.

Junk Bonds Sound Stock-Market Alarm - (www.wsj.com) A rapid realignment of markets after the U.S. presidential election has sent stocks in one direction and corporate bonds in another, a particularly acute divergence that’s leading some investors to suggest the current market action may not last. The movements are most evident in smaller companies, some of which have have junk credit ratings. The small-cap heavy Russell 2000 Index surged 8.7% since the election result, while the biggest junk bond exchange-traded fund, the iShares iBoxx $ High Yield Corporate Bond ETF, fell 2.8%. The divergence, a reversal of recent market action, suggests stock investors are taking an optimistic view of Donald Trump‘s presidency, and the ability of his policies to filter through to corporate bottom lines. Bond investors, on the other hand, are contending with the impact that rising rates will have on borrowing costs.

OTHER STORIES:

Wall Street ends flat as financials' rise offsets tech drop - (www.reuters.com)
Bond Rout Lifts U.S. Yields to 2016 High on Trump Stimulus Bets - (www.bloomberg.com)
Rates on US Treasury bills rise to highest in 8 years - (www.cnbc.com)

Monte dei Paschi debt swap targets bonds for up to 5.3 bln euros - (www.reuters.com)
taly bears brunt of year's biggest bond rout - (www.reuters.com)
China's Central Bank Faces Trump Headache - (www.bloomberg.com)