Markets

Is the Market Looking Through the Current Inflation? December 09, 2021

Posted by Steven Vannelli, CFA in Markets

This Friday we’ll see where the US CPI comes out. We recently got the November print for the Eurozone CPI, and it came in hot, hitting 4.9% year over year. This makes it all the more interesting to see the latest ZEW Inflation expectations for…

Have Option Players Taken the Week Off? November 23, 2021

Posted by Steven Vannelli, CFA in Markets

For years preceding the COVID-19 pandemic, call option volume averaged about 15% of daily NYSE volume. This was a normal level of speculation that investors were used to. Then, as the chart above illustrates, in 2020 call buying just exploded. As of this writing the…

International Stocks Could be Ripe for a Catch-Up Trade November 19, 2021

Posted by Bryce Coward, CFA in Markets

A definite feature of the last decade has been the persistent underperformance of European and Asian stocks vs US stocks. Foreign stocks have underperformed with such consistency that it’s almost expected at this point. Nonetheless, we may be at a tactical point where a mean…

Here’s Why the Fed Could Stay Easy for a LOOONG Time November 05, 2021

Posted by Bryce Coward, CFA in Economy, Markets

This week Jerome Powell tossed the market a bone by hinting that the Fed would be patient in raising short-term interest rates due to the continued slack in the US labor market and inflation that would likely be “transitory”. Yet, today, the unemployment rate dropped…

Special Report: Seasonal Tailwinds November 01, 2021

Posted by Steven Vannelli, CFA in Markets, Portfolio Management

We find compelling evidence that seasonal factors exist, historically leading November and December to be the highest 2-month combined returns all year. In our allocation portfolios, we have increased our equity exposure significantly in an effort to capitalize on these year-end trends. Please find below…

The Epitome of Financial Repression in 2 Charts October 22, 2021

Posted by Bryce Coward, CFA in Markets

By now investors are quite aware of the consequences of financial repression via negative real interest rate policies. Since interest rates on “risk free” government debt are too low to even compensate for inflation, it pushes investors out the risk spectrum in an effort to…

Japan’s Reopening Trade October 18, 2021

Posted by Steven Vannelli, CFA in Economy, Markets

In this quarter’s strategy package, we share our analysis on Japan’s Reopening Trade. In the full slide presentation, we cover the following: -Japan seems to have crushed the COVID-19 virus (for now at least) with daily new cases under 400/day. Lockdowns are over and the…

Is Inflation Starting to Impact Equity Returns? October 12, 2021

Posted by Steven Vannelli, CFA in Economy, Markets

Fed funds futures for 2022 and 2023 have broken out to new highs, likely on the back of rising inflation expectations. As things stand now, the market is looking for three hikes by the end of 2023, with the effective fed funds moving from 8bps…

Evergrande is an Isolated China Issue, for Now September 24, 2021

Posted by Bryce Coward, CFA in Markets

Earlier this week we saw some tremors in the equity markets with the largest single-day selloff in stocks in months. The likely China Evergrande debt default was “blamed” for the weakness, which was then promptly reversed as the week progressed. Questions remain, however, about the…

Mid-Quarter Update: What Does Transitory Mean? September 02, 2021

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

In this Mid-Quarter Update, we discuss our analysis on the following topics: -Recent readings on consumer confidence have rolled over. The surveys are validated by the stagnation in real consumer spending in the last few months. -In conjunction with the slowdown in house sales and…

What is the Culprit(s) for Recent Equity Weakness? August 19, 2021

Posted by Steven Vannelli, CFA in Markets

Just when everyone thought we had COVID-19 whipped, the delta variant came along and US cases inflected higher. The 7-day moving average was about 13,000 in early July and has jumped about 10-fold to 132,000 as of yesterday. The first place this can be seen…

EVs Could Mean Full Cycle Outperformance of Copper Producers August 06, 2021

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

President Biden recently set a target for 50% of all vehicle sales in the US to be fully electric, plugin hybrid, or fuel cell by 2030. Assuming a modest 1% annual growth in new car sales, total new car sales in the US would be…

Here’s Why the US May Have a Housing Boom for the Next 5 Years July 30, 2021

Posted by Bryce Coward, CFA in Economy, Markets

The United States is just at the beginning of a housing boom that could last for the next five years. Of course, most folks who are either homeowners or are in the market to buy a home understand that prices have gone up quite substantially…

The US Energy Sector is in Chronic Atrophy, And That Could be a Good Thing for Energy Investors July 23, 2021

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

Public attitudes toward energy companies are changing, and with it capital investment in energy companies is shrinking. Perhaps nothing speaks louder than actions. In the first quarter of 2021 investment in environmental, social and governance (ESG) focused funds hit a record high by a wide…

Breakdown July 23, 2021

Posted by Steven Vannelli, CFA in Economy, Knowledge Leaders, Markets

We believe the technology sector is broadly breaking down. That’s the bad news. The good news is that the correlation between pure growth stocks and pure value stocks has plunged. This means that growth only explains about 5% of the movement in value stocks right…

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