When can the US achieve broad vaccination of its population: Using the current rate of daily vaccinations (red line, Exhibit 1), we simulated different scenarios that forecast potential vaccine uptake by YE21 (black lines, Exhibit 1) which could lead to herd immunity (see our note here). In our analysis, we consider only the US population…...
The strong start to the year for risk assets was upended in the final week of January, as the rise of Reddit retail traders managed to produce outsized fear amongst the hedge fund community. With that, came massive deleveraging that hadn’t been seen since March 2020 and prior to that in 2009. Morgan Stanley: Monday…...
Welcome to this week’s State of the Markets. Please click the following link to review this week’s SOTM. In this week’s episode, we take a look at some breadth studies with respect to 3 of the major indices to dissect overbought conditions and to validate why we remain of the opinion that market pullbacks are breeding grounds for investor opportunities. “Learn…...
Alpha over Beta. The wild price swings of the past month are a function of two things in our view: 1)excess leverage in the financial system and 2) the market contemplating the transition of the economy from early to mid cycle as the reopening draws near. The good news is that VAR shocks that happen…...
Welcome to this week’s State of the Markets with Wayne Nelson and Seth Golden. Please click the following link to review this week’s SOTM. In this week’s episode, we deconstruct the January Barometer, look into just how expensive the market has become (maybe) and continue to validate where investors can find the greatest returns for their investing capital! “An investor without…...
Correction has arrived, positioning and leverage should do the rest. A combination of peaking rate of change in M1/M2and aggressive short squeezes has led to a significant degrossing by hedge funds. Markets corrected 3-5% with many of our favored trades taking a much needed and expected hit. This is normal in an exuberant bull market…...
The ~3% drawdown in the S&P 500 this week took many by surprise. A key feature of this likely short-lived technical tumble was the accompanying small cap short squeeze, most likely initiated by retail investors whose increased activity has become more interesting lately (see more details below). Although the recent technical selloff and short squeeze…...
The S&P 500 (SPX) did exact what everyone expected it to do this past trading week. If you believe that everyone had the same expectations and the expectations were exactly executed in price action, I have a bridge to sell you! The reality is that the best expectations are satisfied by considering the long-term trend…...
Welcome to this week’s State of the Markets with Wayne Nelson and Seth Golden. Please click the following link to review this week’s SOTM. In this week’s episode, we review the decline that was October and the potential market returns for November and beyond. The market has responded to the election with a robustness of breadth and has moved to focus…...
A question facing most investors today is the outlook for equities, and more broadly market risk. This ties into the outlook for the COVID-19 recovery, inflation and various technical parameters (such as flows, positioning, volatility and bond-equity correlation). Recently, we have seen a number of strategists calling for a market correction or indicating equities are…...
