Equity Risk Premium holds key inputs/ingredients After major market sell-offs, it becomes increasingly difficult to achieve lower-lows. They are not impossible, obviously, just increasingly difficult. At some point, valuations and the hunt for real yield reign supreme. Let’s look at one reason why, and through the lens of the Equity Risk Premium (ERP). Why should…...
Cross-Asset Strategy: Friday’s strong CPI print that led to a surge in yields, along with the sell-off in crypto over the weekend, are weighing on investor sentiment and driving the market lower. However, we believe rates market repricing went too far and the Fed will surprise dovishly relative to what is now priced into the…...
Macro Strategy—Inflation Dimming Economic Outlook: On multiple levels, including strong labor demand, decades-low household leverage, lack of excesses on the housing construction/business investment fronts, massive household savings accumulated during the pandemic, and elevated corporate profits, the U.S. economy would appear well positioned for sustained strong growth. However, the economy has rapidly moved into the late…...
“People who succeed in the stock market also accept periodic losses, setbacks, and unexpected occurrences. Calamitous drops do not scare them out of the game.” – Peter Lynch. The “Market Trap” is laid when the fears of today evoke a belief of ever-worsening circumstances. History has proven, there is no such thing as ever-worsening circumstances,…...
Cross-Asset Strategy: The growth-policy tradeoff appears set to improve in 2H, and earnings revisions turned broadly positive in key regions. Chinese equities may have reached their turning point as lockdowns begin to ease, growth support measures continue, and news reports that China is about to conclude its probe into Didi suggest regulatory risks are easing.…...
The headlines were daunting and played out in price action this past week much as the first 100+ days of the trading year have already demonstrated, TREACHEROUSLY! Here are some of the key headlines this past week that investors were asked to “discount”, as the rally from the prior week failed to generate any follow…...
Due to a scheduling conflict, there will not be a weekly SOTM this week. We anticipate being back on schedule next week. Stay tuned for this weekend’s weekly Research Report! Have a great trading week! With consensus now more in line with our bearish outlook, what’s the bull case? Outside of a peace agreement…...
Many investors and traders were left feeling quite dejected the previous week, as a 6-week losing streak for the major averages turned into a 7-week losing streak. The streak of unprecedented and unpredictable markets remained overcast, and severely punishing all investors. If it is often darkest before the dawn, within the benefit of this past…...
Trading this market can be quite frustrating, with historically high likelihood setups repeatedly failing. I keep myself sane by always remembering, great trading/PM skills are not built on the things that go right, but on managing the things that go wrong. ~Wayne Himelsein If you would like to watch our weekly State of the Market…...
Welcome back traders and investors! I thought it a better way to kick-off this weekend’s Research Report, given the unwelcoming price action by equity markets through 2022. Unwelcoming price action today, but I hope to remind all open-minded and savvy investors that the term unwelcoming is subjective and demands perspective. The markets are in downtrends,…...
