The 10-year and 30-year treasury bonds have sold off by 27bps and 18bps over the last three weeks, putting into serious question the cyclical downtrend in yields that began at the beginning of the year.
Read More
As we noted two days ago, a rising USD has some negative implications for commodity prices as well as emerging market stocks. Since commodities are priced in USD, a rising dollar will have a dampening effect on commodity prices generally.
Read More
The volume of asset-backed commercial paper issued in millions of dollars currently sits at 14-year lows (blue line). After reaching levels of $90 billion issued, the ABCP market now sits at below $9 billion. However, the entire commercial paper market has rebound a little bit from lows made in the beginning of 2013.
Read More
Given that commodities are for the most part priced in USD, it follows that stronger USD weighs on commodity prices, and vice versa. As we can see from the first chart below, the long-term correlation of monthly price changes between the CRB Index and the USD is -.85.
Read More
Australia, being one of the world’s biggest commodity producers, finds itself at the very beginning of the global supply chain for infrastructure investment and many manufactured products. It makes sense then, that magnitude and directional changes in the pace of global investment and consumption would be felt first in Australia.
Read MoreLast week we commented that US mortgage applications weren’t showing the bounce that other housing stats such as housing starts and existing home sales were showing year-to-date. Not only did mortgage applications not bounce back this week, but mortgage applications actually broke down to new lows and are it its lowest level since December 2000.
Read More
Copper, the so called metal with a PhD in economics, seems to be rolling over again at the long-term downtrend line that began in early 2011. The price of copper jumped from $2.95/lbs to about $3.29/lbs between March and July of this year, which was taken as a sign that global growth might be rebounding.
Read MoreWe have been living in a ZIRP world for over 5 years now.
Read More
Each week, the Commodity Futures Trading Commission (CFTC) releases information on the long and short positions of traders in a report known as the Commitments of Traders. Groups are identified and determined by the number of contracts they are currently holding.
Read More
With the major currencies making new 1-year lows against the USD, and with the GaveKal FX Volatility Index at two standard deviations below the long-term mean, we wonder if currency volatility has bottomed.
Read More
Good news on the employment front. The July JOLTS data were released this morning and showed the total nonfarm hires level is at its highest level in 80 months (Nov 2007).
Read MoreOne of the simplest ways to measure whether a stock is an uptrend or downtrend is to see whether the 50-day moving average price is greater than the 200-day moving average price. If yes, the trend is positive and if no it is negative.
Read More
We spend some of our analytical time exploring the relationship between various assets in an effort to understand the context of the market. Earlier in the year several divergences appeared that we took note of: 1) the trend of utility stocks vs.
Read MoreYesterday we noted here the fact that EPS estimates have fallen versus 3 months ago for most stocks in the developed world. In a similar vein, today we note that top line estimates are rising for only 37% of stocks in the MSCI developed world index, meaning they are falling for 63% of stocks.
Read MoreOne way to view the risk profile of a group of companies is to measure the average standard deviation of price changes for that group. We do this for all the sectors and countries comprising the MSCI World Index. This idea is to see how the market is pricing risk across various constituent groups.
Read More