Canada’s federal fiscal picture is set to worsen as deficits and debt rise as a percentage of the economy, according to the latest forecasts from the country’s budgetary watchdog. https://t.co/sac0XwdPtN ...

Deficits are like cheeses: they come in many varieties, are something of a European speciality, and become problematic if left to fester too long https://t.co/BPHgAPxfkA ...

All right, welcome back. We're watching the US 30-year long bond yield following a big auction this afternoon. Rick Santelli, not at the CME Group in Chicago, right here in Anglewood Cliffs, New Jersey at CNBC HQ is here with the bond report.Now, let's get to the 30-year first because it is the news of the afternoon. The grade that you have and it was still pretty good. Yes. Yes.Yesterday was an A+ 10-year auction. The amount of leftovers that the dealer community ended up with was a historic low. It was ye ...

A slight majority of Canadians believe Prime Minister Mark Carney’s plan to run deeper deficits will grow the economy https://t.co/3XqNFHVPE1 ...

Economic Policy & Potential Risks - Surging debt and deficits pose a challenge [1] - Relentless attack on US central bank independence creates uncertainty [1] - Aggressive tariff policies, the most in almost a century, could disrupt markets [1] Market Outlook - Despite potential chaos, the bond market's reaction is unexpected [1]

In much of the rich world finance ministers face both big deficits and voter revolts, and there is little way of satisfying both the bond markets and a disgruntled electorate https://t.co/NiEQtsFg42Illustration: Alex Nabaum https://t.co/CvnsqL6eH1 ...

In much of the rich world politicians face both big deficits and voter revolts, and there is little way of satisfying both the bond markets and a disgruntled electorate https://t.co/GAAhVrRIH6 ...

Interest Rate Trends & Analysis - The global rates market influences domestic rates, with the German 30-year yield reaching its highest since 2011 [1] - Sideways to higher movement is expected for long-term rates, influenced by debt and deficits across various regions including the UK, EU, Japan, and the US [3] - Technical analysis of 10-year yields suggests a midpoint range of 416 to 420 basis points as a key level [4] - A close below 415 basis points could reverse the case for higher rates [4] Spread Analysis - The 30-year minus 10-year spread is the widest it has been since 2021, indicating potentially higher rates on the long end [5] - The 10-year minus 5-year spread is also at its widest in four years, at 47 basis points [5][6] - Curve steepening is anticipated, with two-year yields potentially decreasing while 10, 20, and 30-year yields remain stable [6] Economic Outlook - The economy is expected to perform better than anticipated, supporting a steeper yield curve and higher long-end rates [9] - Inflation may not be the primary driver of long-end rates [8] - Stagflation is not considered a major concern, with a more positive economic outlook prevailing [8][9]

Financial Data and Key Metrics Changes - Net income per diluted share increased by 8.7% year-over-year to $1 per share, with an annualized return on beginning of year equity of 19.1% [11] - Operating earnings were $420 million or $1.05 per share, yielding an annualized return on beginning of year equity of 20% [11] - Stockholders' equity increased by more than $380 million or 4.3% to a record $9.3 billion [15] Business Line Data and Key Metrics Changes - The Insurance segment's accident year loss ratio excluding catastrophes was relatively flat year-over-year at 60.7%, with a combined ratio before catastrophes of 89% [13] - The Reinsurance and Monoline Excess segment's accident year loss ratio excluding catastrophes increased to 54.1%, with a strong combined ratio before catastrophes of 83.8% [13] - Net premiums earned reached a record of $3.1 billion, while net premiums written increased to a record $3.4 billion, showing growth across all lines of business [13] Market Data and Key Metrics Changes - The property market is becoming more competitive, particularly for larger accounts, while smaller accounts face less competition [19][20] - The commercial transportation market continues to see activity from Managing General Agents (MGAs), pushing for rate increases [20] - The professional liability market is mixed, with public Directors and Officers (D&O) insurance beginning to stabilize, while private and non-profit D&O remains competitive [21] Company Strategy and Development Direction - The company is focused on achieving appropriate risk-adjusted returns and is optimistic about growth opportunities in the liability market over the next 12 to 36 months [32] - The company is maintaining a defensive posture in certain areas while leaning into higher hazard, more specialized lines of business [70] - The company is cautious about the competitive dynamics in the reinsurance market, particularly regarding ceding commissions and discipline in casualty lines [25][114] Management's Comments on Operating Environment and Future Outlook - Management highlighted concerns about economic inflation, labor market dynamics, and the resilience of U.S. consumer spending as macroeconomic factors impacting the business [7][9] - The company is optimistic about its ability to manage through potential challenges related to tariffs and labor costs, while also focusing on pricing strategies [45][88] - Management expressed confidence in the investment portfolio's positioning and the potential for improved investment income [31][94] Other Important Information - The company paid ordinary and special dividends totaling $224 million in the quarter, contributing to a growth in book value per share of 6.8% for the quarter and 14.3% year-to-date [16] - The effective tax rate for the quarter was 23.2%, exceeding the U.S. statutory rate due to taxes on foreign earnings and state income taxes [15] Q&A Session Summary Question: Growth potential in the current environment - Management adjusted growth expectations to a range of 8% to 12% from the previous 10% to 15% due to recent market conditions [38] Question: Underlying loss ratio dynamics - The underlying loss ratio remains primarily influenced by business mix, with no unusual factors noted [39] Question: Impact of tariffs and labor costs - Management indicated that current loss activity does not reflect significant impacts from tariffs or labor costs, but they are monitoring the situation closely [45] Question: Trajectory of margins - Management believes that current rates are positioning the company well for future improvements, but cautioned against premature conclusions [47] Question: Capital management and share buybacks - The decision not to repurchase shares was based on maintaining surplus capital for future opportunities, with a focus on special dividends as a more efficient return method [52] Question: Medical inflation and its impact - Management is closely monitoring medical inflation and its potential effects on workers' compensation and stop-loss portfolios, with sensitivity analyses conducted [65] Question: Competitive dynamics in the private client business - The company is experiencing traction in the private client space due to its expertise and value proposition, despite not being the cheapest option [126]

From capricious tariff-setting to blowout deficits, there are ample reasons for investors to be cautious about buying American assets https://t.co/h1Q8r4OPdU ...