After the sharp contraction in economic activity in the early months this year, inventories are running low. Growth gets a tailwind as they get rebuilt. There is tight correlation between economic growth and corporate profits. Stocks are anticipating this. Home … Continued
Small-caps and tech continue to diverge. Post-vaccine news, longs are gravitating toward the former and leaving the latter. Amidst this, signs of fatigue are also showing up on the S&P 500, while VIX acts like it wants to rally. The … Continued
Following futures positions of non-commercials are as of November 17, 2020. 10-year note: Currently net long 152.3k, up 57.7k. Both the 50- and 200-day moving averages closed Thursday at 0.77 percent. The former is rising and the latter dropping. Friday, … Continued
Following futures positions of non-commercials are as of November 10, 2020 (data published this Monday instead of last Friday due to Veterans Day holiday). 10-year note: Currently net long 94.6k, up 100.3k. The last time the 10-year Treasury yield (0.91 … Continued
Easy money is here to stay. That was pretty much the message Chair Powell delivered this week. The US economy is up to the gills in leverage. A sustained rise in interest rates will hurt. The Fed will try to … Continued
US corporations continue to aggressively issue debt in the bond market. Even amidst this supply, demand remains good. Both LQD and HYG are near their record highs. Besides the Fed essentially acting as a backstop, corporate boards are probably also … Continued
The Russell 2000 rallied huge the last seven sessions, as post-Pfizer news in particular investors have rerated value versus growth. With this, next year’s earnings estimates are front and center. Small-cap stocks have delivered big gains for investors November-to-date. With … Continued
US equities surged last week pricing in a divided government – a Democrat in the White House, Republicans in control of the Senate and Democrats of the House of Representatives. Major indices rallied right into important resistance. The focus now … Continued
Following futures positions of non-commercials are as of November 3, 2020. 10-year note: Currently net short 5.7k, up 21.9k. No sooner did the 10-year Treasury yield (0.82 percent) recapture the 200-day than it was lost and then gained back again. … Continued
Following futures positions of non-commercials are as of October 27, 2020. 10-year note: Currently net long 16.2k, down 6.8k. The FOMC meets next week. After this, only one meeting remains this year, slated for December 15-16. It will be interesting … Continued