While the headline payroll numbers for September were positive, 248k vs 215k expected, and the August payroll number was revised much higher to 180K (from 142k), we are nonetheless very disappointed to see the participation drop to the lowest level since February 1977. The participation rate had stabilized since the beginning of the year.
Read MoreWhile many commenters noted how the Russel 2000 has now entered into a correction after another weak close yesterday, we thought it is noteworthy to highlight that this weakness isn’t just in small-caps like most commenters are implying but it is in large-caps as well.
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With another weak performance by the Russell 2000 today (it was down 1.48%), the small cap proxy index has just completed a bearish pattern known by market technicians as a Head & Shoulders pattern.
Read MoreThe US yield curve continues to flatten. Currently, 5-year and 30-year are down 7 basis points and the 10-year is down 8 basis points. If 10-year yields stay at current levels, this would be the largest daily decline in yields since July.
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Below we show the percent of stocks in each MSCI developed market region with positive YTD performance in USD terms. One aiming for a high probability of picking a winning stock would have been well served to avoid Europe this year, and this is becoming increasingly true of Asia.
Read MoreAfter a tough start to the year the percent of stocks in the MSCI World Index showing YTD gains rose steadily from less than 30% in February to nearly 80% in July.
Read MoreYou all remember March 6th, 2009, right?
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Last month we mentioned how world inflation had reached a 56-month low. Well, the latest data (through August) shows world inflation, by our simple average of 33 countries year-over-year change in CPI, is creeping lower again. The latest reading stands at 1.65%.
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The health care sector has undeniably been the stock market leader over the past four years. Looking at the Developed Markets (DM) and Emerging Markets (EM) together, the health care sector has returned 122.4% over the past four years. Besting, the second place consumer discretionary sector by over 22%.
Read MoreThe Q-ratio, which is simply the equity market value of nonfarm, nonfinancial businesses divided by the net worth of those businesses, is at it’s highest level since December 2000. Since 1945, the average level is 0.70. The current reading is over 1 standard deviation above the nearly 70-year average.
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When it comes to global equity returns, the financial sector matters for one simple reason: financial stocks dominate global stock exchanges.
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NYSE margin debt still hasn’t surpassed the all-time high made in in February but it is very close! Margin debt rose by about $3 billion in August and is only $2 billion below the all-time high set in February. Net margin debt inched higher and set another all-time high in August.
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We’ve written extensively so far this week about the narrowing leadership in the global stock market.
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As noted here on Monday, it appears copper prices are about to take another significant leg down. The price of copper has now decisively broken through the rising support line in what appears to be a continuation of the longer-term downtrend that started back in 2011.
Read MoreThere are four developments in the fixed income markets that represent a clear and present danger for stocks. First, high yield spreads continue to widen, diverging from the upward movement in stocks prices. In the chart below we plot high yield spreads against the S&P 500 over the last ten years.
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