Asian equities, no surprise, got hammered overnight, with all but 2 of the markets we track closing notably in the red. Europe's sliding as well this morning, with all but 3 of the 19 bourses we follow trading lower. U.S. stocks have been all over the place this morning: As I type: Dow down 40 points (-0.15%), SP500 down -0.16%, Nasdaq down -0.10%, Russell 2000 down a big -1.48%.
Thursday, September 24, 2020
Wednesday, September 23, 2020
Asian equity markets were mixed overnight; 9 down, 7 up. Europe's hanging in there; 13 of the markets we track are higher, 6 are trading lower as I type. The U.S.'s major averages are struggling one hour into today's session: Dow (despite Nike) down 38 points (0.14%), S&P 500 down -0.53%, Nasdaq down -0.85%, Russell 2000 down -1.08%.
We'll start this week's message off by looking at the data I shared in our internal research call yesterday afternoon. The topic was the day's market internals.
The reason I'm using yesterday's action as my segue to this week's message is because in a number of ways it serves as a nice microcosm of the 2020 equity market to date.
Tuesday, September 22, 2020
Asian equities continue to struggle this week; 13 of the 16 markets we track closed down notably overnight. European stocks are fairing better this morning with 15 of the 19 bourses we follow presently in the green. U.S. stocks are struggling just a bit to start the day: Dow down 36 points (0.13%), S&P 500 flat, up 0.06%, Nasdaq flat, up 0.03%, Russell 2000 down -0.60%.
Monday, September 21, 2020
Yet another jolt to the U.S. political setup, Covid breaking above March's numbers in Europe and a concerning report on major global banks and their alleged relationships with "dangerous players" over the past two decades has world asset markets on edge this morning.
Saturday, September 19, 2020
In yesterday's macro update I mentioned that
"...not everyone agrees with our presently cautious bent. I mean, some folks actually believe now's the time to take the leap and buy the recent dip with both fists."
Well, that's putting it mildly!
Friday, September 18, 2020
Our proprietary macro index gave up 4 points this week; net score -14.00.
Yesterday I asked you to
Asian equities, on balance, rallied a bit overnight, with 10 of the 16 markets we track closing in the green. Europe, on the other hand, is struggling so far on the session, with only 3 of the 19 bourses we track presently in the green. U.S. equity averages are essentially flat. Dow down 58 points (-0.21%), S&P 500 down -0.08%, Nasdaq up 0.15%, Russell 2000 up 0.28%.
Thursday, September 17, 2020
Asian equities got hammered overnight, with all but 2 of the markets we track closing in the red. Europe, while well off the session lows, is taking a beating this morning as well; all but 5 of the 19 bourses we follow presently trading lower. U.S. stocks, also presently off the session lows, are red across the board as I type: Dow down 63 points (-0.22%), S&P 500 down 0.85%, Nasdaq down 1.42%, Russell 2000 down 1.31%.
In our effort to keep you informed as to what we're thinking in the here and now we're forever highlighting herein the at-the-moment trends and developments that instruct our entries into, exits out of, and hedges on various asset classes and securities. Underneath it all of course is the broad macro picture, global general conditions, if you will, that command our attention (analyzing, interpreting, testing, hypothesizing) on virtually a 24/7 basis.
Wednesday, September 16, 2020
Asian equities had a mixed session overnight, with 7 of the 16 markets we track closing lower. Same for Europe this morning, 9 of the 19 bourses we follow currently in the red. And "mixed" pretty much characterizes U.S. stocks to start today's session: Dow up 91 points (0.32%), S&P 500 up 0.11%, Nasdaq down -0.19%, Russell 2000 up 0.75%.
Tuesday, September 15, 2020
Just began digging into the latest Bank for International Settlements Quarterly Review (always a must read, but only if you're, like me, a total geek), released yesterday, and can't help but quote from the opening few paragraphs, as they so echo what you've been reading herein the past months:
Better than expected data out of China inspired a rally in Asia that saw all but 3 of the 16 markets we track closing higher overnight. Europe, riding a sentiment survey that bested all economists' expectations, is following suit so far this morning; 15 of the 19 bourses we follow in the green. And not to be left out this morning are the U.S. equity markets: Dow up 133 points (0.48%), S&P 500 up 0.87%, Nasdaq up 1.51%, Russell 2000 up 0.47%.
Monday, September 14, 2020
Optimistic vaccine headlines and a bit of merger mania saw Asian equities rally overnight (12 of the 16 markets we track closed in the green) and has Europe, on balance, in rally mode as well this morning (12 of the 19 bourses we track up on the session thus far). U.S. equities are bouncing back from two weeks of decline rather nicely: Dow up 319 points (1.30%), S&P 500 up 1.52%, Nasdaq up 2.06%, Russell 2000 up 1.27%.
Friday, September 11, 2020
Asian equities traded mostly higher overnight, with 12 of the 16 markets we track closing in the green. Europe's limping a bit into the U.S. session this morning, with 9 of the 19 bourses we track trading lower. U.S. stocks are (save for small caps) once again catching an early bid: Dow up 190 points (0.69%), S&P 500 up 0.51%, Nasdaq up 0.16%, Russell 2000 down -0.45%.
The VIX (SP500 implied volatility) is down -7.67%. VXN (Nasdaq vol) is down -4.38%. Now, don't be fooled by those steep declines in the pricing of volatility, 27.48 and 36.35 respectively are very precarious levels for stocks broadly.
Thursday, September 10, 2020
It's just a few minutes before the open on this smokey (I live in California) Thursday morning, and despite weekly jobless claims coming in higher than expected, and the U.S. dollar taking a sound beating this morning, U.S. equity futures just turned from notably red to nicely green. Hmm...
Wednesday, September 9, 2020
Tuesday, September 8, 2020
Despite heightened trade tensions between China and the US, as well as border tension between China and India, all but 3 (one being India) of the Asian markets we track closed in the green overnight. Europe, on the other hand, is having a very rough day; all 19 of the bourses we track are trading lower as I type. As is the U.S. so far: Dow down 418 points (-1.49%), S&P 500 down -1.65%, Nasdaq down -2.17%, Russell 2000 down -1.86%.
Monday, September 7, 2020
From William Strauss and Neil Howell's insightful and provocative book: The Fourth Turning: What the Cycles of History Tell Us About America's Next Rendezvous with Destiny:
Saturday, September 5, 2020
Friday, September 4, 2020
So how do we couch the good news around the latest jobs numbers?
Millions of new jobs have been created over the past few months,
Asian stocks for the most part took the U.S.'s lead into their session last night; 13 of the 16 markets we track closed in the red. Europe's fairing a bit better this morning; 10 of 19 indices trading higher so far. U.S. equities are struggling: Dow down 109 points (-0.39%), S&P 500 down -1.25%, Nasdaq down -2.79%, Russell 2000 down -1.16%.
Thursday, September 3, 2020
Asian equities closed mixed overnight (8 of the markets we track up, 8 down). 12 of the 19 European indices we track are in the green so far this morning. U.S. averages are, save for the 30-stock Dow, are struggling this morning: Dow up 61 points (0.21%), S&P 500 down -0.59%, Nasdaq down -1.79%, Russell 2000 down -0.40%.
Wednesday, September 2, 2020
On July 27th I wrote herein: note the bolded sentence...
Given all that’s evolved over the past several decades, given the complete carry-dependent state of the global economy, there’s only one road for the powers-that-be to take going forward; a steady, unrelenting debasement of the US dollar.
Asian equities closed mostly in the green (12 of the 16 markets we track) overnight, Europe's trading mostly higher this morning as well (14 of 19), and the U.S. averages are somewhat mixed as the session gets underway: Dow up 209 points (0.75%), S&P 500 up 0.58%, Nasdaq down -0.13%, Russell 2000 flat +0.04%.
Tuesday, September 1, 2020
Asian stocks closed mostly higher, 10 out of 16 markets we track in the green, last night. Europe's mixed, 10 out of 19 bourses in the red. U.S. equities (save for small caps) are somewhat back (Nasdaq still) in rally mode this morning: Dow up 94 points (0.33%), S&P 500 up 0.36%, Nasdaq up 0.96%, Russell 2000 down -0.05%.
Monday, August 31, 2020
Only one Asian equity index, of the 16 we track, closed higher last night, Japan. And that was apparently thanks to news that Warren Buffett is snatching up stock ($6 billion worth) in Japanese commodities traders. That, plus his recent foray into gold miners suggests that he sympathizes with the base case that happens to presently have us more in commodities than we've ever been.
Europe's not much better so far this morning; 13 of the 19 bourses we track are in the red.
U.S. equities are troubled a bit this morning as well: Dow down 211 points (-0.74%). S&P 500 flat, -0.09%. Nasdaq up 0.55%. Russell 2000 down 0.65%.
Sunday, August 30, 2020
During an insightful discussion featuring macro minds Raoul Pal and Larry McDonald, Larry tells of what inspired, then killed, the short-lived Cobra farming phenomenon of late-1800s India:
Saturday, August 29, 2020
I thought I'd share some of what I added to our research thread this morning. I.e., the more our clients understand what goes on down in the weeds, the more they can put volatility into perspective when it shows up.
Friday, August 28, 2020
Hey, I think I found one!
Yesterday I blogged:
Asian stocks were mixed overnight; the 16 markets we track split the difference by the close, 8 green/8 red. Japan took the hardest hit on news that the longest-running prime minister in its history is stepping down for health reasons. The yen is our third-best performing core portfolio component this morning. I suspect that's not for defensive reasons (the reason we own it) but out of uncertainty, in that Abe's economic scheme was forever a resoundingly yen-weakening proposition. Europe's messy, with 15 of the 19 bourses we track in the red. The U.S. (save for the Nasdaq) is essentially flat so far this morning: Dow up 24 points (0.08%), S&P 500 flat, +0.05%, Nasdaq up 0.35%, Russell 2000 flat -0.07%.
Thursday, August 27, 2020
Asian equities were the definition of mixed overnight; 8 of the markets we track up, 8 down. Europe's getting hammered this morning; all but two of the 19 indices we track are in the red as I type. U.S. equity traders, on the other hand, are, for the most part, liking what they heard from Fed Chairman Powell this morning (more on that later). Dow up 178 (0.63%), S&P 500 up 0.24%, Nasdaq flat +0.02%, Russell 2000 flat -0.04%.
Tuesday, August 25, 2020
Asian stocks closed mostly higher overnight; 11 of the 16 markets we track in the green. Europe, however, had a rough go of it today; 15 of the 19 indices we follow closed in the red. U.S. equities were mixed, but definitely (price-wise) with a positive tilt: Dow down 60 points (-0.21%), S&P 500 up 0.36%, Nasdaq up 0.76%, Russell 2000 up 0.32%.
Monday, August 24, 2020
While we're presently actively exploring safe ways to generate better yields on the historically (for us) high level of cash we're sitting on, I want to reiterate here the point I've been making of late to some of our largest investors: Yes, we're sitting on an atypically for us large chunk of cash, but, like everything else we do -- while, sure, it's defensive too -- it's strategic.
It was risk-on overnight in Asia, with 14 of the 16 markets we track closing higher. Europe's feeling it as well this morning; 17 of the 19 indices we follow comfortably in the green so far. The U.S. too; Dow up 270 (+0.97%), S&P 500 up 0.69%, Nasdaq up 0.35%, Russell 2000 up 0.84%.
Saturday, August 22, 2020
The good news, as we've been reporting herein of late, is that the credit markets -- while ticking ever-so-slightly tighter last week -- have calmed down markedly since the Feb-March panic. I mentioned in a post yesterday that while another equity market selloff from these levels could come swiftly and invoke fears of another liquidity event (all babies going the way of the bathwater), it's our view that the Fed has the liquidity risk properly attended to. And, therefore, such an event we (PWA) would likely exploit to gain exposure to what we're presently after at more opportune prices.
Friday, August 21, 2020
Housing permits and starts have nearly recaptured their pre-recession uptrend.
Morning Note: More Bad Breadth. Plus, The Lately-Rising Dollar and What We're Thinking/Doing About It
Asian equities ended the week on a positive note, with 13 of the 16 markets we track closing higher overnight. Can't quite say the same, however, for Europe, at least so far this morning; 11 of the 19 indices we follow trading lower. U.S. equities, while mostly green, continue to exhibit very concerning breadth (adding the S&P 500 Equal Weight Index herein to illustrate the point): Dow up 84 points (0.30%), S&P 500 up 0.11%, Nasdaq up 0.32%, Russell 2000 down -0.96%, S&P Equal Weight -0.36%.
Thursday, August 20, 2020
Asian equities took a hit overnight, with all 16 markets we track finishing the session lower. Europe's no better this morning; all 19 indices on our radar are in the red. U.S. stocks, on the other hand, are mixed: Dow down 87 points (-0.31%), S&P 500 down -0.15%, Nasdaq up 0.26%, Russell 2000 down -0.74%.
Wednesday, August 19, 2020
"Yesterday’s record close in interesting company ... data compiled by
@Bloomberg reveal that historical days when S&P 500 gained 0.28% or more while 42% or less of members were advancing, were only before & during tech bust (obviously, a small sample size)"
Now, when I say "the market" hasn't even begun to roll over, I'm speaking of the S&P 500 Index, which currently is more concentrated in its top 5 positions than I believe it's ever been.
Here's the one-year chart:
Now, if the market is indeed more than, say, the top 5 weightings in a given index, well, then, things aren't quite as robust as they might otherwise appear.
Here's the one-year chart for the S&P 500 Equal Weight Index (i.e., each component weighed the same):
Of the thirteen featured below, 7 remain in the red on the year:
Of course we should absolutely expect as much given the lousy internals I spoke about in the video.
Yes, as I continue to stress, there's MUCH more to play out before the curtain closes on this particular episode...Thanks for reading,
Tuesday, August 18, 2020
Asian stocks were mostly green overnight with 10 of the 16 markets we track closing higher. Europe has pretty much surrendered its gains from the open, as I type 15 of the 19 indices we track are in the red. US equities are mixed: Dow down 87 points (-0.31%), S&P 500 flat, Nasdaq up 0.30%, Russell 2000 down 0.94%.
Monday, August 17, 2020
Asian equities traded mixed overnight, although China saw a nice rally, as its central bank did more of the central bank stuff that world equity markets are lapping up these days. There's of course the obligatory how long can they keep doing this, and/or, how long will markets continue to buy it? questions come to mind, but we'll continue to explore those in other commentary. Europe's having a nice morning so far, with 16 of the 19 markets we track in the green. US equities are mixed: Dow down 75 points (-0.27%), S&P 500 up 0.29%, Nasdaq up 0.70%, Russell 2000 up 0.38%.
Sunday, August 16, 2020
Amid all of the fancy fundamental and technical analyses firms like ours perform and peruse, we must never lose sight of the simple fact that what we are truly analyzing -- to repeat the gist of our August 5th message -- under all circumstances, and with no exceptions, are the actions and reactions of human beings; on behalf of themselves and their families, on behalf of their business interests, and on behalf of the political posts/parties they occupy -- the world over.
Friday, August 14, 2020
Asian equities traded mostly lower overnight, with 10 of the 16 markets we track closing in the red. Europe's bleeding literally across the board; every one of the 19 equity indices we track is trading lower this morning. U.S. equities are mixed: Dow up 43 points (0.16%), S&P 500 literally flat, Nasdaq down -0.26%, Russell 2000 down -0.19%.
Thursday, August 13, 2020
Asian equities traded mostly higher overnight, with 13 of the 16 markets we track closing in the green. No such luck, however, for Europe this morning; only 4 of the 19 indices we track trading higher. U.S. stocks are mixed as I type: Dow down 31 points (-0.11%), S&P 500 up 0.07%, Nasdaq up 0.47%, Russell 2000 up 0.24%.
Wednesday, August 12, 2020
Asian equities closed yet again mixed overnight; 7 of the markets we track in the green, 9 in the red. Europe, on the other hand, is yet again beginning the day in impressive fashion; 16 of the 19 markets we track presently trading higher. US equities are nicely higher across the board this morning: Dow up 260 points (+.94%), S&P 500 up 1.27%, Nasdaq up 1.63%, Russell 2000 up 0.79%.
The VIX (SP500 volatility) is getting crushed, -7.78% to 22.22. VXN (Nasdaq vol) is supporting this morning's rally thus far as well, -6.65% to 29.75.
Oil futures are up 1.61%, gold's are up $2, silver's down 1% (futures that is, spot price is up), copper's down -.61% and the ag complex is mostly green as I type.
The 10-year treasury is trading lower (yield higher) and the US dollar index is off by -0.11%.
Our core portfolio is off to a decent start this morning; up 1.05% as I type.
I'll circle back a little later with our weekly message. In the meantime here's Popular Delusion's Dylan Grice on what he thinks investing is "about".
"Everyone thinks investing is about being smart. its more about being different."
I agree, although I'd add objectivity and humility...Have a great day!
Tuesday, August 11, 2020
In client review conversations -- in response to the disbelief our more veteran/tutored clients express about the present state of market affairs -- I often find myself harkening back to those tech bubble days (spring of 2000) when retail traders threw all caution to the wind and bid tech stocks into the proverbial stratosphere.
Asian equities traded in mixed, by definition, fashion overnight: 8 of the markets we track closed higher, 8 lower. European markets this morning, however, possess no such ambiguity; 18 of the 19 bourses we follow are solidly in the green as I type. US equities are once again starting the day in let's call it confused fashion; Dow up 296 points (+1.07%), S&P 500 up .21%, Nasdaq down -.80%, Russell 2000 up .94%.
Monday, August 10, 2020
Asian equities traded mostly in the green overnight; 12 of the 16 markets we track closed higher. Same for Europe this morning; 16 of 19 indices presently in the green. U.S. equities are mixed as I type, with the Dow up 244 points (.91%), the S&P 500 up .18%, the Nasdaq down -0.53% and the Russell 2000 up 1.5%.
Sunday, August 9, 2020
Saturday, August 8, 2020
Friday, August 7, 2020
Asian equities had a rough go of it overnight, with all but 3 of the 16 markets we track trading lower; US moves against select Chinese-owned companies inspired an instant wave of selling. Europe's trading mixed this morning, while U.S. major averages are, save for smallcaps, trading modestly negative: Dow down 100 points (-.36%), S&P 500 down -0.18%, Nasdaq down -0.17%, Russell 2000 up 0.12%.
Thursday, August 6, 2020
Wednesday, August 5, 2020
Tuesday, August 4, 2020
Monday, August 3, 2020
Friday, July 31, 2020
Thursday, July 30, 2020
BIZD: ETF TRACKS INDEX OF BUSINESS DEVELOPMENT COMPANIES (BUYERS OF THE WORST CREDITS): Ytd: -30.4%, retraced <50% of BM decline...
LEVERAGED LOAN PRICE INDEX: Ytd: -5.3%, retraced >62% of BM decline…
PSP (Private Equity ETF): Ytd: -15.80%, retraced >62% of BM decline.
HYG: Ytd: -308 bps, retraced >76% of BM decline…
MUNI/TREASURY SPREAD: 122% of 10-yr treas, 61% wider vs equity mkt peak
HY SPREAD (1-day behind): 489 bps, 36% wider vs equity mkt peak
Ba SPREAD: 342 bps, 60% wider vs equity mkt peak
BB-BBB SPREAD: 168 bps, 95% wider vs equity mkt peak
CDS Inv Grade Index 70.37
PWA FIN’L STRESS INDEX -12.5
The wealth that is made by the financial players (and businesses and individuals) who are implementing carry trades is not real wealth of the sort that derives from an economy’s greater ability to produce better goods and services that the general population needs and desires. On the contrary, it causes financial asset prices to become hopelessly distorted, unhinged from the real economy, and therefore ends up misdirecting scarce capital into potentially unproductive uses. Over time, the economy will perform progressively more poorly, with income and wealth more and more concentrated in a few hands.
Nevertheless, it is also important to realize that the carry regime, as it progresses, fundamentally weakens the true power of central banks (and by extension governments). This may seem counterintuitive, but as with regulatory capture, central banks are themselves “captured” by carry. During the intensely deflationary carry crashes (such as occurred in 2008), they appear to have no option other than to increase moral hazard further, via even greater intervention and bailouts. In one of the various seemingly contradictory aspects of the carry regime, central bankers seem to have enormous power—their extraordinary power to create high-powered money, set short-term interest rates, and strongly influence financial markets with everything they say—but ultimately they themselves have little latitude to act. Central banks become merely the agents of carry. Their seeming immense power is, in reality, mostly illusory.
Wednesday, July 29, 2020
"...without question, you want to own things that are priced in dollars!
Now, of course U.S. stocks are priced in dollars, right? Right! And, sure, own some (we do), but be careful doing so when they're priced at 1999ish valuations (by several metrics) and the economy has the proverbial Mount Everest yet to climb.
And definitely own other things priced in dollars that aren't historically expensive."
"Our commodities exposure (DBA and DBB being brand new positions) now makes up roughly 20% of our core portfolio; and I suspect we'll be incrementally adding as things progress."
"You're about to experience, at least at the open, what I'll call a classic what-others-think-others-are-going-to-do rally.
The linked phrase above was the subtitle to my April 10 post; I recommend you read it (again?) when you have a chance. Here's a snippet:"My base case that stocks have yet to see the worst is entirely based on data and experience. My illustrating aplenty herein that bear market retracement rallies are the norm is meant to help our readers understand how incredibly risky it is to wade into this snap-back rally as if the bear market is already over. Which, by the way, would make it the shortest on record -- amid the worst economy on modern record! Just seems like a very far-fetched notion if you ask me..."Still my base case, by the way...In a nutshell -- in the short-run:"Keynes suggested circa a century ago that trading (as opposed to, I'll say, investing in) markets is not about assessing fundamentals, it's about what traders think other traders are going to do. And for the more savvy traders, it's about what they think other traders think other traders are going to do.""
"The next few weeks will be telling, as, per the latest news, a number of states are delaying, and or, reversing certain stages/aspects of their reopening plans.
Half of this week's improvement showed up in the commodity space. Which, coincidentally, is something we anticipated and, therefore, have begun to express in client portfolios.
I should tell you, however, that while rising commodity prices does show up as a positive in our macro index, our bullishness there has everything to do with the prospects for a weaker dollar going forward (and, ultimately, with regard to metals, the prospects for infrastructure spending), as opposed to the prospects for robust economic growth anytime soon."
"...in a world where the world's governments are willing to weaponize their equity markets against their respective economic woes, not to mention against each other, stock prices can remain detached from economic reality for what can seem like a very long time. History (those charts I alluded to), however, strongly suggests that the reattachment can be most painful..."From "The Most Bullish Chart for Stocks Right Now" on July 6:
"Now this one guys/gals is the most bullish chart of all for stocks for the remainder of 2020. And it's really incredible. It's the TGA (treasury general account). Think of it as the treasury's piggy bank. The amount you see there amounts to well over a trillion dollars (1.6 in total) of new borrowing (a trillion being the normal entire-year's budget deficit) that essentially wasn't needed to fund the government. They literally issued this debt just to hold onto the cash. So, why? This is an historic first! Well, as you know, or should know, I struggle with conspiracy theories, but this one is so blatant I can't help it. This is Mnuchin essentially assuring that no matter what, whether Congress passes more stimulus, and/or regardless of what the Fed does, he has the firepower to juice the markets during the critical months leading into you-know-what in November.
Yes, this is huge support for stocks, you can bet on it. However, betting big on stocks given everything else going on (and there's lots) is -- despite what I just wrote -- hugely risky. Stocks can still fall in the face of rampant stimulus, I've seen it... If not over the next few months, dear Lord, just wait till we reach the point when they're forced to let up, even modestly, on the life support for stocks:"
To add a little more to our messaging herein that the equity market is historically disconnected from economic reality these days, here's The Wall Street Journal's Nick Timiraos quoting from this week's banks' earnings calls:WFC: “Our view of the length and severity of the economic downturn has deteriorated considerably"
JPM: "The recessionary part of this you’re going to see down the road"
Citi: "The pandemic has a grip on the economy and it doesn’t seem likely to loosen..."
"The treasury will issue debt without restraint and the Fed will purchase it likewise, indefinitely.
Commodities -- gold especially -- are the most obvious trade under these circumstances. US equities stand to ultimately benefit as well, however -- and this will produce great anxiety for the Fed along the way (due to extreme global carry) -- with bouts of extreme volatility, given the unavoidable economic stagnation such a scenario creates, and the potential for huge political disruption -- regulation, taxation, etc. -- as growing income/wealth inequality continues unabated (exacerbated, in fact) going forward.
Foreign market equities, emerging markets in particular, stand to outperform the US markedly for several years to come; but -- while we anticipate adding there incrementally in the near-term -- we're going to let the COVID situation and the coming election play themselves out before we go there in a big way.
The immediate question for equity markets being, given the abysmal state of macro affairs, political risk, geopolitical risk and so on, will there be the 50+% correction that will reset valuations, etc., to the point I believe necessary for the US market to recapture any semblance of a “fundamentally” investable setup -- at all or anytime soon? Bottom line; that risk is there, which demands that we hedge our equity exposure against a major drawdown either until one occurs or until the risk abates…"
Tuesday, July 28, 2020
Monday, July 27, 2020
Saturday, July 25, 2020
"To really drive home for you the precariousness of current conditions from a purely asset performance standpoint, just two things you need to know: gold is up 23.5% on the year, and if you're willing to lock up your money for 10 years, the U.S. treasury will pay you 0.58% on it annually."
Friday, July 24, 2020
Thursday, July 23, 2020
Wednesday, July 22, 2020
Tuesday, July 21, 2020
Monday, July 20, 2020
Thursday, July 16, 2020
Wednesday, July 15, 2020
"Earnings season kicks off next week. There seems to be a bit of optimism (interestingly) around bank earnings. At first blush, given conditions, and interest rates, that's counter-intuitive. If indeed banks surprise to the upside, it'll virtually have to be about trading revenue and, as I've recently learned, the billions in fees they grabbed by underwriting those small business stimulus loans. Although a few, if not all, of the bigs say they're donating those to charity..."
Tuesday, July 14, 2020
Monday, July 13, 2020
Sunday, July 12, 2020
Friday, July 10, 2020
Thursday, July 9, 2020
Wednesday, July 8, 2020
This Week's Message: Never Share Your "Secrets", and Thoughts on Systems (economics and markets specifically) and on Galileo
Sitting here this afternoon I'm honestly feeling a bit numb after spending much of the morning working on a study I've assigned to myself on the rate-of-change dynamics in the price of a certain asset class and what they possibly say about future price movements in the stock market. I actually have about a century's worth of data to score, so it's a bit monotonous, and time consuming, but so far intriguing. Upon conclusion I'll likely highlight my findings herein. If they're indeed telling, well, then I won't be telling much about the study itself. For, if, say, you happen to discover a legitimate market signal beneath all of the noise, you never ever share it, as it'll only "work" as long as the crowd isn't using it.
Tuesday, July 7, 2020
Monday, July 6, 2020
Friday, July 3, 2020
Thursday, July 2, 2020
Wednesday, July 1, 2020
Tuesday, June 30, 2020
U.S. equities are all over the place this morning. Over the past couple of minutes the Dow has gone from nearly positive to down triple digits, to down 70 as I type. The S&P has been green to red and back to green presently, the Nasdaq has stayed green by roughly a half-percent.
Monday, June 29, 2020
Friday, June 26, 2020
Thursday, June 25, 2020
Stocks staged a big turnaround today sparked by news that the central bank is inviting commercial banks to their we're-bailing-out-the-riskiest-risk-takers party.
Wednesday, June 24, 2020
Tuesday, June 23, 2020
Monday, June 22, 2020
Saturday, June 20, 2020
Friday, June 19, 2020
As you might imagine (particularly if you know Nick, Jeannette, and yours truly [not to mention Ryan, who's presently finding currencies fascinating], and now Dan) we often have quite the inner-office dialogue going on around markets and the economy. We have a group chat feed where any of us can log in, comment, ask questions, etc..
At times, I find it can be instructive enough to share a bit herein.
Thursday, June 18, 2020
Wednesday, June 17, 2020
As for today's market, in a nutshell, the Dow and the S&P 500 took a bit of a hit, the Nasdaq was just a tad to the green, while the Russell 2000 got slammed -1.8%. Our core portfolio mix closed flat on the session.
But, per yesterday's morning note (featured quote below) -- and Stage 6 of the Boom/Bust Cycle -- they're playing the game anyway:
From Bloomberg's Lisa Abramowicz this morning:
"It's not just Davey Day Trader buying the recent rally. Fund managers' June cash levels dropped from 5.7% to 4.7%, the biggest decline since Aug'09, while hedge fund net equity exposure soared to 52% from 34%, the highest since Sept'18: BofA Global June Fund Manager Survey."
Yep, FOMO (Fear Of Missing Out)!
Asian equities were slightly green in the aggregate overnight. Europe's up a bit this morning while in U.S. equities, the Dow and the S&P are flat, Nasdaq's up .4% and the Russell 2000's down a hair.
Tuesday, June 16, 2020
Trump’s promising a trillion dollars in infrastructure, Fed’s buying corporate bonds, retail sales and industrial production will be bouncing off the bottom this morning, Asia screamed higher overnight, Europe’s rallying hard and U.S. equity futures look to open 3% higher…
Monday, June 15, 2020
Sunday, June 14, 2020
Saturday, June 13, 2020
Friday, June 12, 2020
Thursday, June 11, 2020
Wednesday, June 10, 2020
Tuesday, June 9, 2020
Monday, June 8, 2020
Morning Note: Us Being Stubborn, and a 32-Year Old Warren Buffett on the Stock Market (2-minute must-watch video)
Friday, June 5, 2020
The consensus estimate, which jibed with weekly and continuing jobless claims reported throughout the month, was a loss of 7.7 million jobs. What we got was a gain of 2.5 million. That's awesome! But, per below, it's a total head-scratcher.