Markets

Anatomy of a Panic Selloff February 28, 2020

Posted by Bryce Coward, CFA in Markets

Anyone reading this post already knows that palpable panic has set into equity markets over recent days. We present these charts to highlight the extreme nature of the selloff so far, and as a reminder of the rarity of these events. In times like this,…

Mid-Quarter Update: Prognosis Negative February 28, 2020

Posted by Steven Vannelli, CFA in Markets, News

Widespread underperformance of Dow Jones Industrial Average stocks is a significant negative indicator for US stocks in our view. In this special report, we present charts of the 30 Dow stocks relative to long-duration US treasury bonds and gold for the last five years. Spoiler:…

A Selloff, But Not An Actionable Low…Yet February 25, 2020

Posted by Bryce Coward, CFA in Economy, Markets, Portfolio Management

Watching while the largest equity market in the world falls by a whopping 8% in four trading days brings us back to the 2008-2009 meltdown period of the financial crisis. Normally an 8% drop in such a short time frame would present an interesting intermediate-term…

Ready for Action? February 24, 2020

Posted by Steven Vannelli, CFA in Economy, Markets, News

Former Fed Governor and now professor at the University of Rochester, Narayana Kocherlakota penned the following short opinion piece in Bloomberg this morning: Fed Shouldn’t Wait to Cut Interest Rates: Narayana Kocherlakota By Narayana Kocherlakota The world economy is facing a material risk in the…

What’s Behind the Breakout in Gold? February 20, 2020

Posted by Bryce Coward, CFA in Economy, Markets

This week’s breakout in gold is an epic expression of our times in which potential economic problems are quickly followed by massive actual and expected responses by central banks and governments. The problem de jour (for both markets and the public) is of course the…

Why Coronavirus is Scary for Financial Markets January 31, 2020

Posted by Bryce Coward, CFA in Economy, Markets

As we write, US stocks are down about 1.6% on the day, foreign developed market stocks are down 1.8%, and emerging market stocks are down about 2.4%. This type of corrective action did not really come as a surprise to us. Indeed just two weeks…

Short Anatomy of a Sell-Off January 31, 2020

Posted by Steven Vannelli, CFA in Markets, Portfolio Management

Sell-offs can start for any number of endogenous or exogenous events. A mentor used to tell me, “There are a million reasons to sell a stock, but one reason to buy.” What he meant was that there are always personal reasons to sell: tuition is…

What is Driving US Treasury Rates Lower in 2020? January 29, 2020

Posted by Steven Vannelli, CFA in Markets

10-Year US Treasury yields are down about 30bps so far this year, continuing the trend of lower rates that began in the fall of 2018 and confounding investor expectations for rising rates which would validate a turn up in economic activity. The primary driver of…

New All-time Highs on Declining Breadth is Reason for Caution January 16, 2020

Posted by Bryce Coward, CFA in Markets

There are a number of factors that have us tactically concerned about a period of over-exuberance among equity investors. Those include record low put/call ratios and extreme inflows into equity ETFs. But among the more troubling facts of late is the breakdown in breadth we…

Strong 4th Quarter, Election Year Supports the Case for a Strong Q1 December 27, 2019

Posted by Bryce Coward, CFA in Markets

Unless something dramatically changes in the final few days of 2019, the 4th quarter for equity market performance will be one to write home about. The S&P 500 is currently on track to deliver about a 9% price return, which would be the second best…

Incoming Data Continues to Point to Foreign Equity Outperformance December 18, 2019

Posted by Bryce Coward, CFA in Markets

For the last several months we’ve been talking about the distinct possibility of a period of foreign equity outperformance that investors would be remiss to miss. Indeed, it may be hard to contemplate tilting one’s portfolio in favor of foreign markets after such a great…

Consequences of an Inflection in the Chinese Yuan November 21, 2019

Posted by Steven Vannelli, CFA in Economy, Markets, Portfolio Management

As hopes for a trade deal fade, similar to May and August, the CNY is devaluing against the USD again. In our work there are a handful of fairly mechanical relationships that should follow if the CNY continues to devalue. First, in the US, stocks…

Economic Growth Has Not Hit Bottom Yet November 21, 2019

Posted by Bryce Coward, CFA in Economy, Markets

Even as left tail risks to US and global economic growth seem to have been mitigated over recent weeks (more accommodate financial conditions, rising of some PMI data, worst case trade outcome seemingly a lower probability now), incoming data continue to suggest the nadir of…

Not So Fast on the Cyclical Chinese Recovery November 14, 2019

Posted by Bryce Coward, CFA in Economy, Markets

This morning investors were unfortunately treated to a rather disappointing package of October Chinese economic data. Three of the most important hard data series were reported: fixed asset investment, industrial production and retail sales. Each was lower than the previous month and missed expectations, suggesting…

Technology & Materials: Do You Take the Over or the Under? November 08, 2019

Posted by Bryce Coward, CFA in Markets

As each day passes and more evidence of some sort of bottom in economic activity emerges, the chances of market rotation into the more beaten down areas of the global equity market would seem to be rising. In fairness, this is likely not 2012 or…

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Markets

Anatomy of a Panic Selloff February 28, 2020

Mid-Quarter Update: Prognosis Negative February 28, 2020

A Selloff, But Not An Actionable Low…Yet February 25, 2020

Ready for Action? February 24, 2020

What’s Behind the Breakout in Gold? February 20, 2020

Why Coronavirus is Scary for Financial Markets January 31, 2020

Short Anatomy of a Sell-Off January 31, 2020

What is Driving US Treasury Rates Lower in 2020? January 29, 2020

New All-time Highs on Declining Breadth is Reason for Caution January 16, 2020

Strong 4th Quarter, Election Year Supports the Case for a Strong Q1 December 27, 2019

Incoming Data Continues to Point to Foreign Equity Outperformance December 18, 2019

Consequences of an Inflection in the Chinese Yuan November 21, 2019

Economic Growth Has Not Hit Bottom Yet November 21, 2019

Not So Fast on the Cyclical Chinese Recovery November 14, 2019

Technology & Materials: Do You Take the Over or the Under? November 08, 2019

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