BIG NUMBER
$13 Trillion – Global Negative Aggregate Yielding Debt
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WHAT IT IS
The market value of negative yielding global debt, up from $6 trillion in early October of last year. The previous high water mark had been $12 trillion in the summer of 2016.

MARKET/POLICY NOTES
Central banks are indicating easier monetary policy amidst already low rates.  This will tend to push investors further out on the risk curve across all asset classes – one explanation for the new highs in U.S. equities and strong performance of credit and bonds.

HOW MARKETS REACTED
In a word: positively.  U.S. equities hit an all-time high last week as measured by the S&P 500.  Still, they trailed both Emerging Markets (MSCI Emerging Markets Index) and China; the latter saw the biggest rally of any market we track. Bond yields fell.

WHAT THIS MEANS
Weak manufacturing, low inflation and trade concerns clearly have the attention of the global central banks.  They have indicated a willingness to act aggressively to address a potential slowdown in growth.

WHAT TO WATCH
The G20 meeting kicks off on June 28th in Japan with President Trump and China’s President Xi scheduled to meet.  Investors may have given up on a breakthrough agreement, but will be expecting some kind of progress on trade.

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