Following futures positions of non-commercials are as of November 24, 2020 (data published this Monday instead of last Friday due to Thanksgiving holiday). 10-year note: Currently net long 115k, down 37.3k. The 10-year Treasury yield (0.84 percent) has come under … Continued
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
As major US equity indices post record highs, margin debt is inching ever closer to its high from May 2018. In all probability, November will have made a new high in margin debt. Amidst all this risk-on behavior, it is … Continued
Company buybacks are having quite a bit of a dry spell. As corporate boards act thrifty this year, it has not had much impact on stocks. The buyback shortfall is being offset by bulled-up foreigners and investor willingness to take … 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
Pfizer’s positive vaccine news on Monday last week elicited favorable investor response. Moderna’s positive news this Monday generated a lukewarm response. Fatigue is setting in. Major US equity indices are in overbought territory, particularly daily, with several sentiment readings already … 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
Last Monday, major equity indices all opened up strong but by Friday they diverged. Small-caps led, while tech lagged. Despite this, they all closed out the week at/near resistance. Breakout will further push them into extended territory. A breather is … 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