We’ve heard repeatedly from Fed officials that there is no observable reach for yield, but mutual fund flow data paint a different picture.
Read MoreCourtesy of our friends at Sentiment Trader, we present the following chart showing the most recent NAAIM (National Association of Active Investment Managers) survey results. And striking those results are, as they show the average active manager to be levered long and very confident about that bet.
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Railroad carloads traffic is a good ”real” indicator of economic activity in the United States. The one-year moving sum of total carloads oscillated between about 320,000 units to 350,000 units from 1989 to 2008. Since 2008, however, has been between about 260,000 units to 290,000 units.
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Gold has had a rough go over the last month, dropping about $100, and it now finds itself testing the low it made in June. There are many possible taper and non-taper explanations for this persistent weakness.
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There are at least three reasons why the Federal Reserve should be concerned about the recent low inflation readings in the US: 1) About a year ago, inflation started to diverge below a 2% trend line. Over the last year, core inflation has undershot the Fed’s 2% target by alomst half.
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With the notable exceptions of Spain and France, survey data released for Europe’s manufacturing sector were largely positive– a continuation of a trend that began earlier this year: This would seem to indicate an increased likelihood of stronger industrial production data in the coming weeks:
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Healthcare stocks have been the statistically strongest sector in Europe over the last 50 days. There are 28 healthcare companies in Europe that represent 6.3% of the MSCI Europe index and 1.8% of the MSCI World index.
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Over the past quarter, the Yen was weakened by about 5% while the MSCI World is up about 5.5%. This relationship continued last week as the factor with the highest r-squared to MSCI World stock performance was yen correlation. The factor with the lowest r-squared was one-month change in sales estimate.
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Inflation is low around the world. According to our simple average of 33 CPIs (and 22 PPIs) inflation has been falling for the past four months. Not surprising then, inflation surprises are negative as well.
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At 10.3x book value and 50.3x cash flow on average, the biotech industry is among the most expensive in the MSCI World index. There have been some big winners in the biotech industry the last 4 years. Every stock in the industry has outperformed the MSCI World index over this period.
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