Inside The Stock Market ...trends, cross-currents, and outlook
Party Like It's 1999?
Over the last 6-months the "asset-bubble" label has been recklessly attached to Tech stocks. But that label is not right as the "Tech" decline has been concentrated in NASDAQ Internet Index names while the broad Tech sector is near an all-time high.
In Case You Missed Finance Class….
Modern Portfolio Theory debunked: since 1989, higher price volatility has generally been penalized with lower returns across the ten market sectors.
A Quick Take On Time Cycles
We stop short of embracing any sort of fixed stock market time cycle, but it's statistically difficult to discredit certain calendar patterns.
EM Sentiment Readings Reach Extremes
A few measures are suggesting that investor sentiment towards EM has reached a low ebb.
Time For A Spring Shower?
The stock market staged a two-day bearish reversal beginning a few hours after the release of the March employment report, a decline that could —based on the bearish status of a single MTI category (Attitudinal)—carry further before it is finished. But with the S&P 500 (and many other U.S. equity indexes) recording a bull market high as recently as April 2, it’s too early to argue the market top is “in.”
U.S. Markets See Uniform Strength, While The World Seems Fractured
Based on the historical percentages, the bull market should have a minimum of four to six months of life left. But the market has a way of throwing sand in the gears when you think you’ve begun to understand its internal mechanics.
Profits: “Margin”-al Improvement In Q4
Q4’s margin figure is only one tick below the all-time high of 10.3% set in Q4 2011.
Margin Debt: Much Ado About Not Very Much
Margin debt levels are high, but that’s because stock prices are high. The critical relationship is the comparative rates-of-change in Margin Debt and stock prices.
A Milestone You Might Have Missed
The fifth anniversary of the bull market was met with fanfare, but the launch of the Large Cap leadership cycle in April 2011 is receiving no attention whatsoever.
High Quality Stock Rally Cut Short
In December, we declared the market was likely entering into a cycle where High Quality stocks would shine. Unfortunately, market action since then reminds us of the virtue of being humble.
Why Are EM Small Caps & Frontier Markets Outperforming?
Emerging Market investors are extending their “small” bet down to Small Caps and the Frontier Markets. We discuss potential reasons behind their outperformance.
The Bull Market Turns Five
The post-2009 stock market upswing now qualifies as only the sixth cyclical bull market since 1900 to last five years or more. But only three of the previous five-year-old bulls lived to see a sixth birthday.
Bulling Through The History Books
The Dow Jones Industrials’ bull market gain of +150% is well ahead of the long-term median (+86%) and average (+134%), and places the 2009-to-date move as the sixth-best all time.
Stock Market Observations
With our equity exposure high and our disciplines still tilting bullish, we’re naturally more concerned with what might go wrong than missing out on some kind of 2013 repeat.
Market Valuation Check
Stocks have long looked expensive on the basis of dividend yield, but now they look increasingly stretched on Forward EPS.
Valuation: Today Versus The Late 1990s
We “mapped” current readings on six time-tested valuation ratios to the month in which those readings were first matched or exceeded as the late 1990s market bubble developed.
Another Kind Of Decoupling?
We’ve discussed the interrelationships between industrial commodities, commodity-oriented equities and Emerging Market stocks. Getting one’s bet right on any of these three has generally led to profitable positions in all three. But that certainly hasn’t been true in recent months.
Long-Term Equity Performance Coming Up Short
The bull market has pushed short-term annualized performance readings well above median levels, while the longer-term readings remain subdued. But there is a silver lining…
South Korea’s Market Concentration Risk
The “South Korean Discount” comes from high market concentration risks due to: a handful of companies with significant market weights, tight business relationships with suppliers, and high levels of cross-ownership among companies.
Polar Vortex Hits The Markets Too
The stock market kicked off 2014 with a (so far) shallow bout of weakness which we don’t consider to be the start of a new cyclical bear market or even a deep correction.
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