About a year ago oil, value and small cap stocks were plunging. The prevailing narrative was that these issues had absolutely no upside, no access to capital and will be forever forgotten because of HFTs and ETFs. Fast forward one year, oil has more than doubled, energy debt has over a 100% total return, value … Read more
Treasury yields fell to a five week low yesterday. Two weeks ago the street was “puking bonds,” reasonable bids virtually impossible to find and spreads between the bid and ask were gapping higher. In my view the economic environment is continuing to improve thus casting doubts to the sustainability of current yields. I will continue … Read more
The Treasury rally is continuing as the yields on both the 10 and 30 year benchmarks fell to unprecedented levels. Treasuries have posted their best six month return since 1995 according to Bloomberg. Bloomberg also writes there is a growing pool of sovereign debt with negative yields, increasing by $1 trillion in just a week … Read more
What gives? It was almost universally believed Brexit would usher in something worse than September 2008. While I must write no one knows the ultimate outcome and bad stuff may still happen, that is point that no one knows the outcome of Brexit. Is Brexit the proverbial black swan event, which negatively impacts the Establishment … Read more
A Fed official stated yesterday an interest rate hike in June is indeed plausible. The markets are suggesting the odds of such are about the same as that proverbial snowball down under. Equites initially sold off by steep double digits fearing slowing global growth, perhaps the inverse of the comment made by the Fed official. … Read more
Last week the S & P dropped by the greatest amount since February amid lackluster earnings for several large cap momentum issues and disappointing economic data. This week can again be of significance given many of the second tier companies post results, results that can continue to support value as opposed to momentum growth. Many … Read more
Earlier in the week I referenced Goldman Sach’s report stating how the unloved stocks are out performing the most owned [and loved] stocks. Today I will reference a short interest article that has validated some of my arguments as to why the typical stock had greatly underperformed and perhaps as to why the most unloved … Read more
In my view, I think today it is paramount to have a macroeconomic/geopolitical thesis to make investment decisions as I believe the markets/economy are at a major crossroads. Either the market has it correct and the environment is miserable or the Federal Reserve/PIMOC/Goldman has it correct and the economy is positive. What I believe is … Read more
Is the Federal Reserve becoming concerned about margin debt, especially relating to HFTs? Last week I referenced a report stating for the first time in December the Fed questioned its 21 primary dealers whether or not they extend credit to HFTs. Approximately two thirds answered yes. The front page of yesterday’s Wall Street Journal stated … Read more
As widely reported, at one time yesterday the market was experiencing its worst first day of trading since 1932. After a late afternoon partial recovery, markets had it worst first day of trading in 15 years, its sixth poorest start of new year trading since 1932 according to Bloomberg. I am certain there will be … Read more
