Green Book August 2019
Are You Really A Contrarian?
We’re skeptical when investors ascribe “cause” to a market decline.
But it’s hard to dispute that the Trump Tariff Tweets of early May and early August didn’t trigger the declines which erupted both months. Investors have ignored the many reasons we’ve cited to carry a lighter-than-usual equity weighting, choosing instead to act on a couple of Inappropriately Capitalized sentence fragments emanating from the Oval Office.
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Featured Articles
August Is No Time To Disconnect
Rather than stocks disconnecting from the economy, as some equity bears contend, we see the blue chips disconnecting from the rest of the market. The underperformance of leading groups, along with multimonth divergences in momentum, bullish sentiment, and credit spreads are all consistent with the deteriorating prospects for earnings and the economy.
Are You Really A Contrarian?
The need to sound contrarian has become a borderline obsession among market pundits. Media opportunities for talking heads have exploded in the last decade, forcing those who hold the safest consensus views to falsely portray themselves as lonely and misunderstood market mavericks.
The Fed Subsidy Is Wearing Off
Earnings results for the second quarter have so far "beaten" expectations (as they always seem to), but that hasn’t changed the calculus for Small Cap companies. About one-third of them have negative earnings over the last twelve months.
Seeking Yield Among ETFs
The 2.00%-4.99% yield range is the sweet spot for yield investors from a risk/reward standpoint; while the other end of the spectrum (>5% yield) incurs too much risk for the fat payouts. Here we spotlight four ETF strategies that focus on dividend paying stocks.
When A Cut Is Not Enough
The recent rate cut managed to bring policy uncertainty back into the market by two seemingly harmless words—”mid-cycle adjustment.”
Internet Retail: Beyond Amazon
Amazon has become synonymous with the Internet Retail industry, however, this group is comprised of a diverse mix of companies ranging across the market spectrum, and strength is being exhibited throughout the group.
Portfolio Positioning: Deciding Not To Decide
One portfolio strategy that attracts our interest is a barbell between Growth or Quality on the bullish side, paired with a Low or Minimum Volatility sleeve for the bearish side. This approach deals with today’s uncertainties by essentially “deciding not to decide.”
Can Equity Investors Eat Their Cake And Have It Too?
Investor sentiment seems to be unusually conflicted these days. There are worries aplenty, including numerous political skirmishes of consequence around the world, a slowing global economy, and lofty U.S. equity valuations. On the other hand, fiscal stimulus is high for this stage in an economic cycle and the Fed is easing monetary policy, two policy drivers it rarely pays to bet against.
Table of Contents
Stock Market
- Seeking Yield Among ETFs
- Are You Really A Contrarian?
- August Is No Time To Disconnect
- Who Doesn’t Love “Excess” Money?
- Low Vol For All Seasons?
- The Fed Subsidy Is Wearing Off
- Altitudes And Attitudes
- Consumer Vulnerability
- Assessing The Commodity Free-Fall
- Odds & Ends
Of Special Interest
Macro Monitor
Equity Strategies
Market Internals
Portfolios
Major Trend
Estimating the Downside
At Random
August Is No Time To Disconnect
Rather than stocks disconnecting from the economy, as some equity bears contend, we see the blue chips disconnecting from the rest of the market. The underperformance of leading groups, along with multimonth divergences in momentum, bullish sentiment, and credit spreads are all consistent with the deteriorating prospects for earnings and the economy.
Are You Really A Contrarian?
The need to sound contrarian has become a borderline obsession among market pundits. Media opportunities for talking heads have exploded in the last decade, forcing those who hold the safest consensus views to falsely portray themselves as lonely and misunderstood market mavericks.
The Fed Subsidy Is Wearing Off
Earnings results for the second quarter have so far "beaten" expectations (as they always seem to), but that hasn’t changed the calculus for Small Cap companies. About one-third of them have negative earnings over the last twelve months.
Seeking Yield Among ETFs
The 2.00%-4.99% yield range is the sweet spot for yield investors from a risk/reward standpoint; while the other end of the spectrum (>5% yield) incurs too much risk for the fat payouts. Here we spotlight four ETF strategies that focus on dividend paying stocks.
When A Cut Is Not Enough
The recent rate cut managed to bring policy uncertainty back into the market by two seemingly harmless words—”mid-cycle adjustment.”
Internet Retail: Beyond Amazon
Amazon has become synonymous with the Internet Retail industry, however, this group is comprised of a diverse mix of companies ranging across the market spectrum, and strength is being exhibited throughout the group.
Portfolio Positioning: Deciding Not To Decide
One portfolio strategy that attracts our interest is a barbell between Growth or Quality on the bullish side, paired with a Low or Minimum Volatility sleeve for the bearish side. This approach deals with today’s uncertainties by essentially “deciding not to decide.”
Can Equity Investors Eat Their Cake And Have It Too?
Investor sentiment seems to be unusually conflicted these days. There are worries aplenty, including numerous political skirmishes of consequence around the world, a slowing global economy, and lofty U.S. equity valuations. On the other hand, fiscal stimulus is high for this stage in an economic cycle and the Fed is easing monetary policy, two policy drivers it rarely pays to bet against.
Stock Market
- Seeking Yield Among ETFs
- Are You Really A Contrarian?
- August Is No Time To Disconnect
- Who Doesn’t Love “Excess” Money?
- Low Vol For All Seasons?
- The Fed Subsidy Is Wearing Off
- Altitudes And Attitudes
- Consumer Vulnerability
- Assessing The Commodity Free-Fall
- Odds & Ends