LIBOR (London Interbank Offered Rate) is a good measure of the cost of corporate borrowing because it is the average of interest rates estimated by each of the leading banks in London that it would be charged were it to borrow from other banks. Typically, a rising LIBOR rate is a sign of stress in the corporate credit markets, as seen in 2008/2009. We are seeing LIBOR rising again, but for a different reason: the unintended (or intended) consequences of government regulation. The Blackrock Blog looks into the cause and effect here.

Riskalyze tracks the flow of funds moving in and out of individual accounts on a daily basis. With over $100 billion of assets managed on their platform, this data provides a unique way to track potential trends.

August 7th – 13th

Top three holdings with most money flowing in:

  1. Amazon (AMZN)

  2. Consumer Staples (XLP)

  3. Floating Rate (LFRAX)

Top three holdings with most money flowing out:

  1. Muni Bonds (TFI)

  2. Utilities (VPU, XLU)

  3. Reynolds American Inc. (RAI)

According to Riskalyze, advisor use of Amazon and Consumer Staples increased by over 6% week over week and advisor use of TFI decreased over 5% week over week. Advisor use of Utilities (VPU and XLU) decreased by over 6% week over week.

Brian Wesbury, First Trust Chief Economist, clearly defines what he sees as the cause of the Great Recession 2008/2009 and why our economy remains resilient despite the best efforts of government.

Read his insightful thoughts in this week's Monday Morning Outlook.