Monday, November 11, 2019

Some Magical Thinking Going On In The Corporate Debt Market

In last Thursday's video I said the following, with regard to present under-the-surface risks compared to what we faced leading into the last "great recession":

Sunday, November 10, 2019

Chart, and Quote, of the Day

This chart and accompanying stats, along with Friday's video commentary and last week's weekly message, adds to our presently defensive narrative:

Saturday, November 9, 2019

Friday, November 8, 2019

Careful On The Slopes

IMA's CEO and Chief Investment Officer Vitaliy Katsenelson, in a recent Real Vision interview, offered up the perfect analogy for the market environment we in our view presently face:

Video Commentary: Quick Look At General Conditions

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Quote of the Day: Scariness In The Debt Market

In yesterday's video I mentioned the scariness of what we're seeing in the private equity space, in leveraged loans, and in collateralized loan obligations (CLOs).

Thursday, November 7, 2019

This Week's Message: Greed In Markets Isn't Good If You're Bullish On Stocks -- Or -- Who's Swimming Naked?

Personal note: Chatting with Nick after the close this afternoon I found myself venting on behalf of anyone who might be exposed to this market on a short-term basis. I don't know that in my 35 years of doing what I do I've seen a more myopic, purely headline driven market. Of course the now-huge preponderance of algorithmic trading is (in terms of dimension and influence) a relatively (as in the past decade or so) new thing, and not to mention the social media platforms upon which traders become totally distracted -- and led through a veritable labyrinth of theories on everything from macro economics to day trading -- makes for utter short-term confusion in markets; particularly today, with its intense political and geopolitical backdrop.

Video Commentary: Legitimate Trade Optimism, What Lies Beneath, And How Our Hedge Plays Out

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Wednesday, November 6, 2019

Tuesday, November 5, 2019

Quote of the Day: China Now Playing Hardball

All of the promising trade rhetoric coming from President Trump and company of late appears to have given Xi the green light to go for the jugularemphasis mine...

This Morning's Log Entry

11/5/19 Tuesday

As I suggested in Sunday's blog post, given the latest momentum, historical precedent (past years like 2019), seasonality, odds of soft Brexit and huge incentive to ink a “Phase 1” U.S./China trade deal, the year-end (return, as opposed to risk/return) setup looks good for equities. Potential problem being, sentiment is ramping up notably, and — given the abysmal predictive track record of the short-term consensus — that’s a contrarian indicator. 

Monday, November 4, 2019

Bonus Quote of the Day

I mentioned the prospects for the following in this morning's video commentary. If I'm right about the White House's present stock market-centricity (a no-deal "phase 1" would play pure havoc with markets), China may very well get what it's after; despite the political push back the Administration is bound to receive from both sides of the aisle:

Quote of the Day: Feels Familiar

The following reply to hedge fund consultant Thomas Thornton's blurb this morning (about the market rallying on trade rhetoric) echoes our latest video message:

Video Commentary: Wind Machines Set On High

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Sunday, November 3, 2019

Quote of the Day: Insiders Fading Recent Rallies

Considering seasonality (November and December tend to be very good months for stocks), Friday's better than expected jobs number, the Fed's recent rate cut and its dovish cooing, and the market's propensity to trade higher on anything suggesting trade war(s) are not due to escalate (the White House -- as the latest tweets, etc., suggest -- clearly gets that message), a strong year-end for stocks is making a lot of sense. Although, I have to say, considering the consensus pessimism coming into what turned out to be a very good October (markets love to disappoint the consensus), perhaps a strong year-end makes a little too much sense.

Friday, November 1, 2019

Quote of the Day

Here's a bit more from the IMF's latest Global Financial Stability Report that speaks to our concerns over the present level of stock and bond prices relative to the underlying fundamentals (i.e., valuations):

Market Commentary (video)

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