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Keep an Eye on the Yuan & Corporate Spreads May 28, 2020

By Steven Vannelli, CFA in Economy, Markets

Since the March 23, 2020 low, when the Federal Reserve announced basically unlimited liquidity via a variety of programs, corporate spreads have narrowed, and the stock market has risen substantially. In the chart below, I overlay US investment grade spreads over the S&P 500 Index….

Important Divergence Between Equities and High-Yield Credit April 30, 2020

By Steven Vannelli, CFA in Economy, Markets

While not 100% correlated, there tends to be a pretty good relationship between movements in the S&P 500 and credit spreads, both investment grade (IG) and high-yield (HY). As stocks sold off in February and March, credit spreads widened rapidly. And, then on March 23,…

Spotlight Naver: South Korea’s Top Search Engine Dominates with Web Cartoons March 25, 2020

By Knowledge Leaders Team in Knowledge Leaders

With 30 million daily users, South Korea’s top search engine is focused not on the desktop, but rather the phones in people’s pockets, cars, city streets and shops, aiming to connect people with each other, shopping and entertainment. To do so, the firm relies on…

Why the Fed Cut Rates by 50bps: Will it Help? March 03, 2020

By Steven Vannelli, CFA in Economy, Markets, News

Despite the relief rally yesterday, financial conditions have tightened significantly in the last couple weeks. This likely explains why the Fed just made an emergency 50bps cut to the fed funds rate. The graph below highlights that the two main areas of weaker financial conditions…

Spotlight Energy Recovery: Changing Economics Where Fluids Flow March 03, 2020

By Knowledge Leaders Team in Knowledge Leaders

What began as a breakthrough device for filtering saltwater in 1992 has – through a commitment to innovation ever since — transformed Energy Recovery Inc. into the most innovative industrials company in the world, as measured by R&D as a percent of sales. According to…

Mid-Quarter Update: Prognosis Negative February 28, 2020

By Steven Vannelli, CFA in Markets, News

Widespread underperformance of Dow Jones Industrial Average stocks is a significant negative indicator for US stocks in our view. In this special report, we present charts of the 30 Dow stocks relative to long-duration US treasury bonds and gold for the last five years. Spoiler:…

Ready for Action? February 24, 2020

By Steven Vannelli, CFA in Economy, Markets, News

Former Fed Governor and now professor at the University of Rochester, Narayana Kocherlakota penned the following short opinion piece in Bloomberg this morning: Fed Shouldn’t Wait to Cut Interest Rates: Narayana Kocherlakota By Narayana Kocherlakota The world economy is facing a material risk in the…

Spotlight Illumina: Unlocking DNA to Protect Humanity from Disease (Including Coronavirus) February 20, 2020

By Knowledge Leaders Team in Knowledge Leaders

When companies commit to investing in innovation, the results compound over time, leading them to possess deep reservoirs of knowledge. We call these companies Knowledge Leaders, and such is the case for San Diego, California-based Illumina, the world leader in DNA sequencing and the No….

A JOLT to Job Openings & Asset Expectations February 11, 2020

By Steven Vannelli, CFA in Economy

This morning the monthly job openings and labor turnover (JOLTS) report was released, and it came in significantly shy of expectations. While Bloomberg’s consensus estimate was for 6.925 million job openings, the actual number came in at 6.423. It is important to keep in mind…

Short Anatomy of a Sell-Off January 31, 2020

By Steven Vannelli, CFA in Markets, Portfolio Management

Sell-offs can start for any number of endogenous or exogenous events. A mentor used to tell me, “There are a million reasons to sell a stock, but one reason to buy.” What he meant was that there are always personal reasons to sell: tuition is…

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The information presented here is for informational purposes only and is not to be construed as an offer to sell, or the solicitation of an offer to buy, securities. Some investments are not suitable for all investors, and there can be no assurance that any investment strategy will be successful. Hyperlinks may be included in this message that provide direct access to other internet resources, including web sites. While we believe these links are to reliable sources, Knowledge Leaders Capital (“KLC”) has no control over the accuracy or content of information contained on these sites. Although we make every effort to ensure such links are accurate, up to date and relevant, we have no control over pages maintained by external providers. The views expressed by these external providers on their own web pages or on external sites they link to are not necessarily those of Knowledge Leaders Capital.

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Any reference to Index performance does not represent the performance of any investment product offered by Knowledge Leaders Capital, LLC. An investor cannot invest directly in an index. The performance of client account may vary from the Index performance. Index returns shown are not reflective of actual investor performance nor do they reflect fees and expenses applicable to investing.

Companies are selected for “Spotlights” based on high levels of innovation activities in their respective industries and illustrate innovation being employed across all sectors and geographies. Spotlight selection is separate from stock selection by the investment team. Spotlights are not necessarily representative of investment opportunities and can be selected regardless of investment performance or inclusion as a KLC holding.