The Wall Street Journal – Short Sellers Give Up as Stocks Run to New Records A gauge of bets against stocks is at a four-year low even as warning signs persist Times are tough for skeptics of the bull market. Flummoxed by the endurance of a 2017 rally that produced its 27th S&P 500 record this… Continue reading A Contrarian Sell Signal?
The Economist – Buttonwood: Could bond funds break the market? The Bank of England worries about a sell-off GOOD generals know that the next war will be fought with different weapons and tactics from the last. Similarly, financial regulators are right to worry that the next crisis may not resemble the credit crunch of 2007-08. The… Continue reading The Liquidity Mismatch In The Bond Market
The Wall Street Journal – Fed Faces Inflation Conundrum The central bank is expected to keep interest rates steady at its policy meeting next week; some officials have started to voice concern about soft inflation The unemployment rate, which hit a 16-year low in May, shows labor markets are tightening. That argues for the Fed… Continue reading The Fed’s Inflation Problem
Summary A quick look at large cap value equity performance so far this year suggests a challenging time for value stocks. But this is an incomplete picture and performance among smaller cap value stocks has been very strong. We note that year to date returns in value ETFs, particularly those with higher exposure to… Continue reading Value ETFs Riding High on Small Cap Outperformance
Bloomberg Businessweek – OPEC Oil Woes Go Beyond Nigeria and Libya Iraq’s cooperation is waning. The Organization of Petroleum Exporting Countries’ output is rising and Libya and Nigeria — exempt from making production curbs because of internal strife — aren’t the only problem. Iraq, the group’s second-largest member that asked for an exemption but didn’t get… Continue reading Another Fault Line in OPEC Compliance
Bloomberg – Three Years Into Cheap Oil, Gulf Is Still Depending on a Rebound Energy-rich Gulf Arab nations have scrambled to adjust to the slump in oil prices since 2014. Three years on, their economies are mired in weak growth and largely just as dependent on crude as they ever were. The six members of… Continue reading OPEC’s Dependency On Oil
The Financial Times – Seven charts that show how the developed world is losing its edge What is happening to the world economy? Here are some answers, in seven charts. They reveal a world undergoing profound changes. The most important transformation of recent decades has been the declining weight of the high-income countries in global… Continue reading The Rise Of Emerging Markets
The Wall Street Journal – Markets’ Steady Climb in 2017 Defies Historic Odds Stock markets go up and down: It is a fact of life. Except in 2017. Three major stock-market benchmarks in the U.S., Europe and Asia have avoided pullbacks this year, commonly defined as 5% declines from recent highs. Never in at least… Continue reading Slow & Steady Wins The Race For This Global Stock Rally
The Federal Reserve Bank of Atlanta – GDPNow The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2017 is 2.5 percent on July 19, up from 2.4 percent on July 14. The forecast of second-quarter real residential investment growth increased from -1.6 percent to -0.6 percent after… Continue reading GDP Estimates Continue Heading In The Wrong Direction
LPL Financial – You Are Here It has been a great start to 2017, with the S&P 500 Index up more than 11% year to date, but be aware that the index has, on average, peaked near here going back the past 20 years before regrouping for a fourth quarter run-up. Per Ryan Detrick, Senior… Continue reading Stock Seasonality
The Wall Street Journal – How Quants Calm the Stock Market The funds are discovering surprises before they can create big stock-market moves. There may be a less-noticed factor dampening volatility with more staying power: quant trading. The share of trading done by funds run by algorithms has doubled in just four years to over a… Continue reading Blame Quants For The Lack Of Volatility