Equities are facing one of the best backdrops for sustained gains next year. After a prolonged period of elevated risks (global trade war, COVID-19 pandemic, US election uncertainty, etc.), the outlook is clearing with the business cycle expanding and risks diminishing. We expect a “market nirvana” scenario for equities with the melt-up continuing into 1H21,…...
Market and VolatilityCommentary Equity Macro and Quantitative Outlook for 2021 Our outlook for 2021 is positive for equities and more broadly for risky assets (see Global Asset Allocation). We expect markets to be driven by recovery from the COVID-19 crisis at the back of highly effective vaccines and continued extraordinary monetary and fiscal support. Given…...
Please click the following link to review our commentary on Sentiment, Leverage, Is it Early 2018 Again or…? What would you say is the most interesting finding in the historical data noted below? The table identifies years in which the S&P 500 captures a 30% or greater return. The most interesting concept concerning the chart…...
There has been a punditry that has remained sidelined or angered by the markets’ surmising of the future, and with record-level stock prices over the last several months. Those who chose to join this camp of investors and market watchers has likely been found wanting for better entry points. When those better entry points arrived,…...
Welcome to this week’s State of the Markets. Please click the following link to review the SOTM video. In this week’s edition we take a look back at a strong November to gauge the probabilities for S&P 500 returns in December and beyond. Market breadth and history paint a picture of a strong uptrend that should continue into 2021, but without a game…...
The equity market, for which we’ll use the S&P 500 (SPX) as our guide, will always maintain varying degrees of volatility. Volatility can be managed and absorbed by investors in a variety of ways. Having said that, there is only 1 way in which to trade the market, WITH VOLATILITY! Please take note of the…...
Welcome back to our weekend Research Report and look inside all the macro-market driving forces for which we analyze the landscape alongside investors/traders. With only 4 trading weeks to go in 2020, it goes without saying that the macro-market outlook is likely to improve in 2021, given the unprecedented deteriorations in many macro-market factors we…...
Investors are increasingly embracing the recovery. We laid out our bullish 12 month view in our 2021 Outlook (Show Me the Money!) and spent last week talking with investors around the globe. Our call for higher earnings to drive returns seemed mostly consensus and we received little push back on our call for multiples to…...
Goldman Sachs chief political economist Alec Phillips Goldman Sachs now offers that it’s “base case” for the next fiscal relief package no longer anticipates a stimulus before 2021, resulting in a 50% cut to its Q4 GDP forecast, from 6% growth to 3%. Its chief political economist Alec Phillips writes that with Congress having recessed for Thanksgiving…...
Show Me the Money! 2020 was all about beta and understanding how equity markets trade in and around a recession that handed us the fattest pitch we’ve seen in a decade. 2021 will be much more about stock picking (alpha) and should favor those companies that can deliver earnings growth that isn’t already expected or…...
