Newsclips
Volume Is Not Low!
December 31, 2018
Do not fall into the trap of thinking this holiday season's market gyrations are just noise by assuming volume is low. In reality, this past week has been one of the heavier volume weeks of the year.
Do not fall into the trap of thinking this holiday season's market gyrations are just noise by assuming volume is low. In reality, this past week has been one of the heavier volume weeks of the year.
Today's topics include algo trading, the global slowdown, stock valuations vs. returns, FOMC communication, hedge fund thinking, IPO returns, Deutsche Bank, junk bond outflows and women in investing.
Jim was on CNBC yesterday talking about the Fed's use of the term automatic pilot and why the market rejected this approach.
High Yield investors continue to rely on index products like ETFs, CDX and put options to hedge positions instead of selling high yield bonds. This represents a risk as the bonds that make up these indices are too different to assume they can trade as one. When stresses rise enough, these bonds could go their separate ways, making index level strategies ineffective.
Money is leaving active managers, but not passive investments. This is hurting the stocks of asset managers.
Today's topics include volume going in different directions, the 60/40 portfolio, Trump vs Powell, German Banks, a bear market bounce, the Fed thinks globally, the Fed's plan in 2019, the government shutdown and crude oil.
Fed watching may have become a sport once again. If yesterday's massive rally was due to a perceived belief that the Fed has caved, the markets will be looking for affirmation from Fed officials. If traders don't hear the right words soon, we would expect the declines to continue.
Yesterday's surge of 4.96% in the S&P 500 was one of the 20 best days in the post-World War 2 period. Unfortunately, the vast majority of these days occur in a bear market and the average loss over the ensuing year is 15%.
Today's topics include tariffs, the government shutdown, bearish talk, global debt, defending the Fed, natural gas prices, fun facts on yesterday's rally and a delay in economic releases.