Fed-Induced Equity Volatility

With little economic or political news this week, markets kept doing what they’ve done since late December. The Nasdaq-100 is essentially at record highs. In a day or two the S&P 500 will cover the 20 more points to the upside to get to its record highs. Meanwhile the VIX volatility index broke lower to
Equity Universe Update

Equity Universe Update

Markets continued to rally this past week in a “buy the rumour” anticipation of an announcement of a U.S.-China trade deal. The White House said on Friday after three days of trade talks with Chinese officials in Washington that the negotiations made progress on numerous key issues but significant work remains. As soon as the
Bulls Step Up Joust With Bears

Bulls Step Up Joust With Bears

We had a rather slow news week giving way to a tight trading range on equity indexes. Chinese and U.S. negotiators have been working line-by-line through the text of an agreement that can be put before President Trump and counterpart Xi Jinping to defuse a nearly year-long trade war. As talks are not public, traders

Volatility Picking Up, Yields Inverting As Equities Near Highs

As the world crumbles around the U.S., within the New York stock market, prices have seemed immune to events outside America. The U.K. Parliament is pushing Brexit towards a crisis by failing to agree on an exit deal. European leaders just accorded the U.K. three more months (pushing back the March 29 deadline for the

Mining A Few Stocks At The PDAC

  The week’s news has been dominated by Brexit. The Brexit process could see yet more twists and turn this week following another defeat of Prime Minister Theresa May's withdrawal deal. U.K. lawmakers rejected the deal again on Tuesday evening by 149 votes, despite some latch-minute assurances from the EU. The Brexit situation remains a

Growing Risk Of An Earnings Recession

The weekly winning streak for U.S. stock finally came to an end in the final full week of March. Not much news this week to drive equity prices. The fall in equity prices this week was simply due to the trading algos which pushed key indexes to major resistance levels, then reversed into sell programs

Stocks Up, Bonds Up. Which Market Is Wrong?

Nine weeks of gains for U.S. stocks. Credit for the rally again goes to “trade hopes” (the media is at a loss in explaining this rally). But in reality, this is a momentum squeeze trade, killing all those who assumed a second down-leg in stocks would follow the December crash. Equities are getting more over-bought

An Unpriced Risk For Equities?

Make it eight weeks of gains for U.S. stocks. No one foresaw more than a short-covering rally in December. When everyone thinks the same way, the market will go the other way. The rally since December 24 is more amazing than the rally to start 2018 on news of the Trump tax cut. Nothing has

Fed-Up…And Then Some

It has been an interesting two months on financial markets. After the worst month of December for U.S. equites since the 1930s, we got the best January since 1987. Wild market swings on very little change in macro fundamentals. Obviously speculation over the popping of the equity bubble and forced unwinding of leveraged long positions