This week's chart is of the GSCI Commodity ETF (GSG) which may or may not have made a bottom. As you can see, this rally has produced a higher low on the chart, something most technicians take as a positive. The problem is that we've seen this movie before, back in early 2015, and the rally eventually failed which is [...]
The risk budgets are again unchanged for this month. For the moderate risk investor, the allocation between risk assets and bonds remains at 40/60. The changes in our indicators this month were not significant enough to warrant a change. Credit spreads stopped narrowing and have recently been widening again, ever so slightly. Valuations, long term momentum and the yield curve [...]
You don't often see a move like this in a bond market. This the long term, high grade corporate bond ETF from SPDR, up 6.6% in the last month. I chose this chart because of what it shows about modern markets, which don't allow for much introspection on the part of investors. We're all traders now and when the momentum [...]
Economic Reports Scorecard The economic reports since the last update present a dichotomy. While there has been an improvement in the surprises - more better than expected reports - the overall tone of the reports has been fairly negative. Part of the explanation for that is the plethora of regional Fed reports over the last two weeks, almost all of [...]
Janet Yellen thinks she wants inflation. The market thinks she's going to get it: The hawks at the Fed are losing the battle but I suspect they will win the war - after Yellen gets what she wants.
The theme for Single Country ETFs over the last month is either countries that produce a lot of natural resources (commodities) or Countries in which sane people don't invest. Okay, maybe sanity isn't the proper metric but surely investors who can't afford to take a loss shouldn't be investing in Russia, Peru or Turkey, all three of which make the [...]
Global stock markets, especially in the US, have made a furious comeback from the lousy start of the year. At its worst level the S&P 500 was down 11% year to date and 15% from its peak late last spring. At that nadir the market was trading at roughly the same level as November of 2013, over two years of [...]
The last month has seen a shift in the fortunes of energy stocks with the sector leading the pack with a return over 11%. Will it last? That probably depends more on the direction of the US dollar than it does any of the alleged production agreements that get so much press and rarely produce anything other than a press [...]
Credit spreads are a big input to our investment process. It was the widening of spreads that convinced us to reduce our equity allocation before the volatility of last year. But active asset allocation requires that you get two consecutive decisions correct and that isn't an easy task. Right now, for instance, we are watching spreads intently trying to figure [...]
Economic Reports Scorecard The economic data calendar has been light the last two weeks but the tone of the data has generally improved. On the whole though I find it hard to discern a big change in the US economy. The two manufacturing surveys were bright spots in the ongoing manufacturing recession. Empire State and Philly Fed both were much [...]
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