Blog

Commercial Traders Are Hedged The Most Ever Against Further Euro Depreciation March 30, 2015

By Knowledge Leaders Team in Markets

Commercial hedgers (i.e smart money) aren’t buying that the precipitous decline in the euro against the dollar has come to an end.

$20 Billion Jump In Margin Debt In February March 30, 2015

By Knowledge Leaders Team in Economy

NYSE margin debt increased by $20 billion in February. The one-month change is the largest change in 8 months. Margin debt is at the second highest level of all time and it currently stands just $787 million below the all-time high set in February 2014.

Growth Expectations Are No Longer Cratering For Energy Stocks March 27, 2015

By Knowledge Leaders Team in Markets

Sales and earning growth expectations for energy stocks are still pretty awful for the next fiscal year (FY1). Sales are expected to drop by 17% and earnings by a whopping -29%. However, earnings are expected to make a V-shaped rebound.

Runs, Slumps & Tactical Allocation March 26, 2015

By Knowledge Leaders Team in Portfolio Management

Similar to a basketball player with a ”hot hand”, stocks go on statistical runs. And similar to a player with a ”cold streak”, stocks have slumps. Over time, with a proper perspective, it is easy to measure the extent to which these runs and slumps play out in the market and invest accordingly.

A Checkup on the Yen & Leaderhisp Trends Among Japanese Stocks March 25, 2015

By Knowledge Leaders Team in Markets

After two years of devaluation, the Japanese Yen is quite undervalued by our work. In the first chart below, we show the JP Morgan broad and narrow Japanese Yen relative to long-term trendlines. By these measures, the yen is around 25% below the 25 year average.

Look to Asia for the Strongest Under the Surface Market Trends March 24, 2015

By Knowledge Leaders Team in Markets

Even though US stocks as gauged by the S&P 500 are near their all-time highs, trends under the surface are deteriorating ever so slightly. In Europe and especially in the Pacific, however, the opposite is happening. Below we show three charts per MSCI developed market region showing various measures of breadth and momentum.

Assets At US Fed Are (Finally) Declining March 23, 2015

By Knowledge Leaders Team in Economy

Throughout QE3, one of our favorite charts to look at was the three-month change in total fed assets. You could overlay this series with bonds or stocks or other economic indicators and find some interesting relationship.

From 5-Years To 30-Years, TIPS Implied Inflation Expectations Are Under 2% March 23, 2015

By Knowledge Leaders Team in Economy

Inflation is falling and so are inflation expectations. We and the majority of the rest of the financial community have been highlighting this for most of 2015.

The Other “Most Crowded” Trade is (Still) to Short Long-term Treasury Bonds March 19, 2015

By Knowledge Leaders Team in Economy

In a nutshell, we are absolutely amazed at the amount of pain endured by speculators who are short long-term treasury bonds.

Why Not Just Buy The US 5-Year Treasury? March 19, 2015

By Knowledge Leaders Team in Economy

The collapse in yields around the developed world is startling. For fun, we wanted to see how many 5-year or longer dated government bonds are currently yielding less than the US 5-year on-the-run treasury bond (which is down 23 bps YTD itself).

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