In the last few weeks stock market sentiment as expressed in options has come full circle. Back in August we were noting a rather amazing level of outright speculation in stock options, mostly by small traders that were buying short-dated out of the money calls…
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We’ve been writing for the last month about the risks, and then the corrective activity in the stock market. Even as the market didn’t peak until the first few days of September, it “feels” like this pause has lasted longer than that. And yet, we…
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Two weeks ago, I wrote about the rising likelihood of corrective action in the equity markets, which was a follow up to our mid-quarter update. In both pieces we detailed some disturbing indications that suggested US stocks, especially large US stocks, had gotten quite a…
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The returns of the 2009-2020 bull market were nothing short of extraordinary. From the 2009 low in the S&P 500 to the 2020 high, stocks gained a massive 488%, or nearly 18% on an annualized basis. This compares to an average nominal price return for…
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Arguably the two most significant macroeconomic events taking place in markets currently are the drop in US Treasury yields to near historic lows and the breakdown of Chinese yuan below the “line in the sand” 7.0 level. Oddly enough, a similar thing happened back in…
Read MoreDear Stakeholders, We’d like to take this opportunity to thank you all for your ongoing support and attention and to wish you the very best for 2018! In the next year, we’ll continue to focus our data driven analysis on what we feel are the…
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While today’s better than expected rise in the flash PMI indicator (black line) for the euro zone is a welcome surprise, it would seem that it will take quite a bit more improvement before we can reasonably expect substantial progress in the recovery of important metrics such as GDP or industrial production: By country, France
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It would be one thing if the recent fall in the price of oil was an isolated event completely explainable by supply side and/or geopolitical factors such as overproduction or the desire of the Western powers to punish Russia for its Ukrainian crusade. That, however, does not seem to be the case.
Read MoreAs of the close yesterday, the US two-year treasury yield was sitting at 61 basis points. For a little perspective, the two-year started the year at 39 basis points and hit a low in September 2011 of 17 basis points.
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Faithful followers will already know that we do not rely on meetings with management or analyst reports in our methodology for finding the world’s best knowledge leaders.
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The spread between 30-year treasury yields and 10-year treasury yields fell to 65 basis points yesterday which is the lowest spread since January 21st, 2009. Since April 2013, the spread has narrowed by 59 basis points. As the long end has flattened, the spread between high yield and AAA bonds has narrowed considerably.
Read MoreTwo weeks ago we mentioned that over the past several years the last six weeks of each year has tended to either strongly favor cyclical stocks or counter-cyclical stocks. Today, we wanted to update that chart.
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After today’s close, using our equal weighting methodology, the MSCI World Energy sector is in a technical bear market (down 20%). In the table below, we can see that as of Friday’s close, the MSCI World energy sector was down 19.07%.
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Nonfarm payrolls came in well above expectations at 321K vs expectations of 230K for November. In addition, the previous two months were both upwardly revised by a total 44K jobs. Private nonfarm payrolls were up a very impressive 314K.
Read MoreGaveKal Capital’s Bryce Coward looks at the exploding growth of ETFs and offers an idea on how to combine ETFs with mutual funds in an optimal way to improve the risk and return characteristics of portfolios.
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