Wednesday, September 30, 2020

Quote of the Day: The "Real Second Wave"

Okay, just one more before I go quiet for a few days. This speaks as much as anything as to why we continue to sound a cautious note...

Macro strategist Julien Brigden tweeted this today above a Bloomberg news search titled "job cuts, firings, layoffs."

This Week's Message: Where We Presently Stand

In a recent weekly message we scratched the surface of the presently popular inflation/deflation debate among some of today's brightest macro thinkers. This week we're going to take a deeper dive into that discussion and clue you in to where we presently stand on the issue and how we expect to manage it going forward.

Morning Message: The Carnival

In yesterday's morning note I pointed out what motivates policymakers these days (the market). If you happen to struggle with that, with my cynicism that is, well, struggle away. 

It's not that I don't get that a buoyant market leads to confidence and a buoyantly-spending consumer, it's that 36 years of experience and the study of 360+ years of history tells me that such irresponsible pumping of markets and allocation of public resources tends to ultimately lead to extreme financial pain, not only for the unsuspecting investors who get sucked in, but for the folks who truly need the help, as deflating bubbles deflate the desire, if not the means, to consume beyond one's basic necessities, destroying opportunity in the process.

Tuesday, September 29, 2020

Morning Note: Forgive Me My Cynicism

“We definitely need another round of stimulus here, not only for confidence for the American public and workers, but also for the markets,” Michelle Connell, the owner and president of Portia Capital Management, said on Bloomberg Television. “Going into this election, that would definitely help.”
Allow me to tweak that statement just a bit to capture the fundamental belief that guides the powers-that-"stimulate"- in today's top-down, big-government world:

Monday, September 28, 2020

Quotes of the Day: "Rushing Out" Onto That Ice

In Saturday's video commentary I suggested that the last time the ice on the lake (my metaphor for equity markets) was this thin and the temperature this warm the ice ultimately broke.

Morning Note: World in Rally Mode This Morning

Surprisingly good industrial production numbers out of China (I'll suspend the caveats galore this morning), a bit of optimism over Europe's 2021's prospects/hope over Brexit talks this week, and the anticipation of another bazooka fiscal stimulus package in the U.S. -- and/or a bit of that Pavlovian dip-buying -- has world markets rallying this morning. 

Sunday, September 27, 2020

God's Greatest Work

Well, faithful readers, I'll be giving you a break next Thursday thru Sunday. No morning notes, no quotes of the day, no macro update, etc., to take in, as I'll be attempting at least to force upon myself a rare few days of disconnectedness. 

Typically, when I find myself away from my normal surroundings I remain engaged (connected) until the clock strikes one (pt), but this time the plan is to be fully engaged in what I'll say is -- outside of first my family, then markets and economies -- my one true passion, fly fishing. And it'll have my fullest attention while markets are trading the latter part of next week.

Hence, me re-posting the message below (I'll be joining a dear friend whom I first met in early fall 2008 and introduced to my readers back in 2010, this time on the Missouri River in Helena, Montana). 

Only continue if you're in the mood for something non-financial...

Saturday, September 26, 2020

Macro and Market Update (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Friday, September 25, 2020

Morning Note: Seeing That Commodities Dip We Were Hoping For, But Wait...

Asian equities were mixed overnight, 10 markets we track closed up, 6 down. Europe's suffering so far this morning, with only 3 of the 19 markets we track trading higher. U.S. stocks are starting the day in the red as well: Dow down 100 points (-0.37%), S&P 500 down -0.38%, Nasdaq down -0.19%, Russell 2000 down -0.52%.

Thursday, September 24, 2020

Morning Note: Speaking of the Dollar

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%. 

Wednesday, September 23, 2020

Morning Note: The Rise of Leverage

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%.

This Week's Message: "Awesome Time to Be Alive"

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

Morning Note: Messy

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

Morning Note: Nowhere to Hide (This Morning)...

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

Charts of the Day: Comfortable Being in the Minority

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

Macro Update: Is the Reopening Bounce Fading?? -- And -- Careful Taking That Leap!

Our proprietary macro index gave up 4 points this week; net score -14.00.

Quotes of the Day: Lower Interest Rates Explain Much About Stocks of Late

Yesterday I asked you to

Morning Note: "It Ain't Ever Different"

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

Morning Note

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%.

This Week's Message: History's Rhymes

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

Morning Note: More on the Disconnect

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

Quotes of the Day: Beware the "Self-fulfilling Mechanisms"

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:

Morning Note: Untutored Traders Are Not To Be Chastened, Well... Not Just Yet...

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

Morning Note: A "Fascinating", And Telling, Development, and more....

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

Macro Update: Blushing Socialists -- And -- The Dollar Bears Close Watching!

Macro conditions, as indicated by this week's scoring of our PWA Macro Index, continue, after last week's hiccup, to show net improvement. Although, not nearly to the point that would have us comfortably allocating assets in a manner reflecting strong odds that the next sustainable expansion is underway. 

Morning Note: Tough Times Yield Good Things, If.....

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

Chart of the Day

Well, that dollar/stock market nastiness I keep harping on is playing itself out in today's session as well:

This Week's Message: Bad News Be Good News

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

Quick note on today's action...

Was thinking about jumping on the blog and offering a quick market update, given this morning's strong rally. Nick just made the task easy.

Morning Note: Natural Rhythms

Asian equities followed the U.S. into the red in the overnight session; 14 of the 16 markets we track closed lower. Europe, on the other hand, is rebounding sharply this morning; 17 of 19 bourses are trading notably green thus far. U.S. markets are, as I type, attempting to break a 3-day string of sharp losses with an impressive rally: Dow up 453 points (1.65%), S&P 500 up 1.86%, Nasdaq up 2.25%, Russell 2000 up 0.34%.

Tuesday, September 8, 2020

Morning Note: The Question of the Day

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%.

Saturday, September 5, 2020

This Morning's Log Entry: Short-term Structural Factors Evaporating

On occasion I'll share from our internal market log. In the interest of time, I simply cut and pasted this morning's entry herein and hit "publish." So it lacks the editing I might otherwise perform for public consumption. Therefore, feel free to shoot me an email, or comment below, if you'd like me to clarify any term or statistic featured. I'll get back to you before the weekend's out.

Have a nice one,

Friday, September 4, 2020

Macro Update: How To Couch The Jobs Report -- And -- Circumventing the Rest/Recovery Cycle...

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,


Morning Note: Time Will Tell

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

Today's Market Action, Etc. (video)

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:


Chart of the Day: VIX at All-Time High High

You've noticed that I feature two volatility measures in each morning note; reason being, they can be telling. 

Morning Note: Like Only the Year 2000

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

This Week's Message: The Dollar is Key -- And -- Powell's Restless Sleep

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.

Morning Note: Unamused European Central Bank

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

Quick Post-Market Note, And A Few Charts...

Following up on this morning's note about the stinky breadth the stock market can't seem to rid itself of.

Morning Note: Ponder This -- Or -- Should We Ride This Rocket?

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%.