Dec 18, 2019 | US Economy, US Equities
The auto and housing sectors are two parts of the economy that are highly sensitive to interest rate changes. In light of the Fed’s dovish pivot at the start of the year, culminating in 3x25bps of interest rate cuts, we would expect activity in both sectors to surge....
Nov 13, 2019 | US Economy, US Equities
The S&P has been very resilient this year in the face of slowing growth, falling earnings and trade war uncertainty. However, underneath the surface, market rotations have been very bearish. Over the past year, high-yield credit has underperformed investment grade...
Oct 11, 2019 | US Economy, US Equities
With consumer confidence measures released a couple of weeks ago, we have observed an interesting divergence between the University of Michigan consumer sentiment index and Conference Board consumer confidence index (top-left chart). When we plot the spread and...
Sep 6, 2019 | US Equities
Falling yields across the developed market world have posed greater hurdles for investors with yield and income targets. As the spread between bond yields and equity dividend-yields diverge, these investors move up the risk spectrum to meet their targets. As such, we...
Apr 12, 2019 | US Equities
Short volatility positions are back at extreme levels once again, showing the growth of complacency among market participants. The more dovish than expected Fed has allowed volatility sellers to become more emboldened, and speculative VIX future positions are back up...
Jan 25, 2019 | US Economy, US Equities
This post was taken from our January 8th weekly report. We would characterise US equity indices today as being in a bear market. The official definition is a 20% decline from the recent high, close to close, but what does this mean in practice for investors? (The...
Oct 26, 2018 | US Economy, US Equities
We have previously discussed that we see the end of the dollar’s rally coming into view, and that further reasonably-sized rallies (~2-3%) over the next 1-3 months should be used to take profits on long dollar positions. The DXY has rallied over 7% this year, and a...
Jul 13, 2018 | US Economy, US Equities
(from our weekly report of May 29th) Momentum continues to carry the market. Of the main pure factors listed by Bloomberg for the US, it is the best performing on a YTD and a one-year basis (top-left chart). At the other end of the scale, the value factor has...
Jun 13, 2018 | Featured, Framework, Global Economy, Japan, US Economy, US Equities
Recessions are like death – it’s not a matter of if they will happen, but when. Morbid? Perhaps, but as Steve Jobs put it, “Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life… death...
