Can we blame the yen for the recent market decline and severe rotation from large to small caps? Before discussing the yen and its potential role, it’s important to disclaim that this is just one possible theory to explain the recent violent market decline and rotation. The yen carry trade occurs when hedge funds and […]
In a stunning reversal of opinion, ex. New York Fed Governor Bill Dudley now calls on the Fed to immediately cut rates. In a Bloomberg article titled I Changed My Mind. The Fed Needs To Cut Rates Now, he states: “I’ve long been in the ‘higher for longer’ camp…The facts have changed, so I’ve changed […]
Making sense of home sales and prices data is challenging as there is little activity in the real estate markets. High mortgage rates have made it difficult for buyers to buy homes. Accordingly, more would-be sellers are unable or unwilling to sell because they do not want to trade their current low mortgage rate for […]
To show the dramatic shift in market breadth, we compare the SimpleVisor Absolute/Relative sector and factor analysis from yesterday to one month ago. The top graphs show that technology (XLK) was the only sector with a positive absolute and relative score a month ago. Today, every sector except technology has a positive absolute score, and […]
Over the five trading days ending July 16, the small-cap Russell 2000 Index (IWM) had its largest five-day outperformance versus the S&P 500 (SPY) since the two ETFs started trading in 2000. In just five days, IWM beat SPY by nearly 10%. Despite the recent outperformance, the S&P 500 is still beating small caps by […]
On Wednesday, the Nasdaq fell by nearly 3%, the most significant decline in over two years. However, the Dow, representing more value stocks, was up over half a percent and set a record high. If the recent rotations out of technology, communications, and the largest market-cap stocks continue, the broad S&P 500 and the Nasdaq […]
On Tuesday, we published Fed Rate Cuts – A Signal To Sell Stocks And Buy Bonds? The article presents a historical context for what investors can expect when the Fed cuts rates. Unlike the bullish sentiment prevailing around rate cuts, historical reality has not been so friendly to equity investors. So what can we expect? […]
Goldman Sachs has been vocal over the last week or two, making a good case for the Fed to cut rates as soon as the July 31st FOMC meeting. Goldman Sachs strategist Jan Hitzius was quoted as follows: While September remains our baseline, we see a solid rationale for already cutting in July. If the […]
The University of Michigan consumer sentiment survey (UM) unexpectedly fell sharply a month ago after steadily improving. The report aligned with recent consumer surveys, retail sales data, and revenues from retail-oriented companies. Last Friday, the latest UM survey further confirmed a downshift in consumers’ sentiment. Let’s start with some perspective on the latest data. The […]