When it comes to safe haven investments, the world generally invests in two assets: US Treasuries or German Bunds. Recently, bunds seem to be the preferred ”risk-free” investment of choice by a wide margin which has historically been a negative signal for stocks ....
A few weeks ago, we noted the relationship between an inverted VIX curve and declines in the S&P500 (see here). Taking a longer-term view, we see that the last few years have been relatively quiet-characterized by few, intermittent inversions and minor pullbacks in the index....
The S&P Small Cap 600 has now underperformed the S&P 500 by over 10% since March. July was particularly brutal as small caps underperformed by nearly 6% in that month alone. This relative underperformance has been somewhat predictable given what the Fed has been up...
Earlier this week as asked what junk bonds know that stocks don’t. Since then junk spreads to the 10-year US Treasury bond have widened another 20bps as they have accelerated higher. Given the 88% correlation with stocks over the last year, this is something that...
From a theoretical standpoint equity and high yield debt are not all that different. In both cases consideration of the return of one’s capital plays a large part in the investment process since both forms of capital are at the bottom of the capital structure....
Demand for increasing protection against stock losses increased yesterday, as the price of the VIX jumped relative to the price of its own futures. In the past, an inversion between the spot and 3-month prices has signaled a decline in the S&P 500....
Back in December we wrote a piece entitled, ”Decomposing the S&P 500 PE Ratio: How Can the Market PE be ”Low” and Stocks be Expensive at the Same Time?” in which we showed how the market capitalization of the S&P 500, and many other indexes...
Ending a 66-day streak of consecutive days without a 1% down finish, the S&P500 finally succumbed to statistics as it lost about 1.2% today. Bonds and gold, on the other hand, rallied as the US 10-year treasury yield lost 7bps, the 30-year lost 6bps, and...
The CBOE has an interesting daily index that tries to measure the risk of a ”black swan” or a two-standard deviation from the mean type of event in the next 30 days....
We usually prefer in our blog posts to give the reader a nice linear explanation of what we are laying out in front of them. Sometimes, however, when we are perusing our chart library we find a variety of charts that are interesting but are...
Yesterday we wrote about the how the current price level of the S&P 500 was about one standard deviation higher than its four year moving average price level (last chart below). We noted the rarity of this event, but stated that this precludes neither further...
Stock prices as measured by the S&P 500 have risen some 190% from the low in March of 2009. The spectacular thrust this bull market has seen has put stocks above their moving average price levels by a wide margin....
Many of our readers are probably familiar with the concept of a ”random walk” in which stocks are just as likely to go up as down on any given day (i.e. the outcome is a coin flip)....
Lumber prices are now down nearly 21% from the December peak of $375/bft and are now trading at $297.6/btf. We’ve noted several times how lumber prices (a measure of the health of the US economy) have completely disconnected from stock prices, and today’s action confirms...
Stocks are once again departing from most other asset classes today as the S&P 500 and Russell 2000 rip higher while treasury yields and most hard commodities are down on the day, though higher than in early morning futures trading....
