On Monday, the Russell 2000 busted through 1250s. This has been an important price point going back five years. Despite lofty earnings expectations for both this year and next, this week’s action is a thumbs-up from markets. As long as … Continued
If not for the intraday reversal, the S&P 500 Tuesday came very close to ending the ongoing bear market. Regardless how things shake out near term, at least until February, margin debt stood elevated – relatively speaking. In the prior … Continued
Margin debt has diverged from US stocks – or not. It depends if margin debt is pitted against large- or small-caps. The former shows divergence, the latter not. Historically, FINRA margin debt tends to move hand in hand with US … Continued
US reliance on debt is growing. Having already just about used up the conventional monetary tool and a massive balance sheet, the Fed is looking for new tools – a la Japan. Stocks’ reaction function to Japanification is key. At … Continued
Foreigners, who had been cutting exposure for a while, have been warming up to U.S. stocks of late. Bulls obviously would like this to continue. Historically, foreigners’ activity and the S&P 500 have shown a tendency to move in tandem. … Continued
Major US equity indices continue to attract bids and are trading at fresh highs. Greed rules, with several metrics at nosebleed levels. In a seasonally favorable period, crazy can get crazier – at least that is what bulls hope. How … Continued
Buybacks by S&P 500 companies continue at an aggressive pace. This makes up for shortfalls coming from margin debt and money market assets. Help of late is also coming from the Fed. Buybacks snapped back up in 3Q19. After a … Continued
Following futures positions of non-commercials are as of November 19, 2019. 10-year note: Currently net short 183.5k, up 34.7k. Interesting dynamics are in play in the sovereign bond market. In the 12-months to October, US budget deficit crossed $1 trillion. … Continued
Amidst new highs in major US equity indices, two important data points came out Monday – one positive, one not so. Foreign buying – or a lack thereof – is an important component in US stocks. A relationship between the … Continued
With momentum on their side, equity bulls hope metrics such as money-market funds, margin debt and even foreign buying of US stocks begin to cooperate better. In this scenario, volatility, already suppressed, is vulnerable to another leg lower. Non-commercials are … Continued