ISM key for US economy, not Iran

Only a few weeks ago, top-of-mind risk for market participants was the trade war, according to BAML’s Global Fund Manager Survey. Now it is highly likely the list would be topped by tensions in the Middle East after the US assassination of the Iranian general, Qasem...

Autos will lag other rate-sensitive sectors

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....

Tactical Long in MLPs for April

This post is taken from our weekly report dated April 3rd 2018. In our November 28th 2017 Weekly report, we recommended short-term long MLP positions into year-end on bearish sentiment and fundamental divergence of the MLP index vs crude oil prices. This worked well...

US Stock-Bond Ratio Reaching Extreme

This post is taken from our weekly report dated January 23rd 2018. We are seeing a rotation into equities and out of bonds at the start of this year. BAML, using EPFR data, noted that equity fund flows over the past 4 weeks are up to $58 billion, the largest ever, and...

US Homebuilders: Tactical Short Against Consumer Staples

Anticipated rebuilding after the US hurricanes have helped push up bullish sentiment on US homebuilders to very high levels, offering a tactical relative-value opportunity. The top-left chart shows VP’s Sentiment Z-score on US homebuilders, which have hit 5-year...