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America's Best Weapon in the Opioid Epidemic Just Got Cheaper

America's Best Weapon in the Opioid Epidemic Just Got Cheaper

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22 March 2019



Video commentary for March 21st 2019



Eoin Treacy's view

A link to today's video commentary is posted in the Subscriber's Area. 

Some of the topics discussed include Fed goes on pause, yield curve spread contracts, bond market pricing in a rate cut, Wall Street rallies on a reduced headwind from liquidity contraction, banks pull back, Dollar rebounds, emerging markets steady, gold eases.  



Traders' Rate-Cut Bets Shift Goalposts for Fed Playing Catchup

This article by Liz Capo McCormick for Bloomberg may be of interest to subscribers. Here is a section:

Money-market traders have proven skeptical in recent years -- and much of the time rightly so -- about just how much the central bank might be able to push rates back up toward more historically normal levels. Officials on Wednesday scaled back from two to zero the number of rate increases they foresee in 2019.

Futures markets, which were already leaning toward a cut this year, have pushed the probability of easing to about 50 percent. For next year, a cut is fully priced in. The turnaround in Fed expectations in recent months has been accompanied by a rebound in stocks, which tumbled in December amid concern about the economy and the prospect of rate hikes.

“The Fed got the signal from markets last year as they were crashing and were pretty much devouring the economy,” said Robert Tipp, chief investment strategist at PGIM Fixed Income, which oversees about $716 billion. “A cut this year is possible. This is a good environment for U.S. fixed income,” and the 10-year yield has room to fall, he said.


Eoin Treacy's view

The big question after the Fed’s about face on raising rates is, are they moving early enough to avoid an economic contraction? The logic is reasonably straight forward. The Fed would not have announced such a major shift in policy unless they were worried about the economic and market outlook. By going on pause and waiting for additional information they are signaling a willingness to listen to what the market is telling them.



Powell Aims to Avoid Japan Deflation Trap With Dovish Tilt

This article by Rich Miller and Craig Torres for Bloomberg may be of interest to subscribers. Here is a section:

That’s the type of situation that Japan fell into two decades ago and with which Europe is flirting now. It’s a path that could ultimately lead to a deflationary downturn as households and businesses put off borrowing and spending today because they’re convinced prices will be lower tomorrow, no matter how far the central bank lowers interest rates.

“We are not getting any inflation and the risk is that we find out -- as did Europe and Japan -- that we are stuck and that the central bank isn’t able to raise inflation,” said Mark Spindel, chief investment officer at Potomac River Capital in Washington.

The Fed hasn’t hit 2 percent inflation on a sustained basis since formally adopting that objective in 2012. In December, the personal consumption expenditures price index that the Fed targets rose 1.7 percent from a year earlier.

The extra yield investors demand to hold 10-year Treasuries over two-year notes was 13 basis points, highlighting market conviction that inflation will stay subdued over the next decade.


Eoin Treacy's view

The Fed has stated in the last week they are willing to let inflation run hot in order to create a self-sustaining trend which suggests we are likely to have an easy monetary environment for the foreseeable future.



America's Best Weapon in the Opioid Epidemic Just Got Cheaper

This article by Ari Altstedter for Bloomberg may be of interest to subscribers. Here is a section:

It’s potentially a really big deal,” said Brendan Saloner, an assistant professor at the Johns Hopkins Bloomberg School of Public Health, who has studied the opioid addiction crisis. Suboxone Film has “a really important role in the overall strategy of combating the overdose crisis,” he said, adding that placing patients on the drug cuts their risk of overdose in half.

For now, the U.S. opioid epidemic shows few signs of abating: annual opioid overdose deaths in the U.S. are expected to climb to 81,700 in 2025, a 147 percent increase from 2015, according to a study last month by the Massachusetts General Hospital Institute of Technology Assessment. The human and financial costs have led states, counties and cities to sue drugmakers and distributors, seeking billions of dollars.

Opioid Crisis
Suboxone Film allows the opioid-based drug buprenorphine to be absorbed through the mouth to help control cravings and stave off withdrawal. When combined with counseling and support services, that type of medically assisted therapy is considered one of the most effective ways to treat opioid addiction. It’s also expensive, especially for uninsured patients.


Eoin Treacy's view

The trend of opioid use remains a worrying development in the USA, where heroin, prescription drugs and fentanyl all represent avenues through which addiction is expanding. The availability of these drugs is an obvious problem which has been exacerbated by over prescribing medications, the war against the Taliban which has boosted heroin production and cheap fentanyl exports via regular mail from China.



Eoin's personal portfolio: precious metal long initiated March 8th



Eoin Treacy's view

Details of this trade are posted in the Subscriber's Area. 



2019: The 50th year of The Chart Seminar



Eoin Treacy's view

I have had word from the inestimable Mrs. Fuller that the London Philharmonic Orchestra are planning a memorial concert on October 5th at the Royal Festival Hall. It is envisaged that there will be drinks and canapes afterwards. Since this is the 50th year of The Chart Seminar we will be conducting the event on October 3rd and 4th.

I also plan on holding a New York event, potentially in June, and am in discussions with a partner in how best to organise it.

In the meantime, if you have any questions, would like to attend, or have a suggestion for another venue please feel to reach out to Sarah at [email protected].  

The full rate for The Chart Seminar is £1799 + VAT. (Please note US, Australian and Asian delegates, as non-EU residents are not liable for VAT). Annual subscribers are offered a discounted rate of £850. Anyone booking more than one place can also avail of the £850 rate for the second and subsequent delegates.





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