After the recent correction, many investors are asking how to respond in their portfolios. I’m recommending clients hold on to equity exposure, even consider increasing it. Below, I run through my case. Reason 1: Valuations For the first time since 1956, the dividend yield on the S&P 500 is above the 10-year US Treasury interest […]
Yesterday and today were host to a few more macro data points all signaling basically the same thing – a synchronized slowdown in Asia which appears to be driven by China. In the five charts below we show that Chinese CPI remains anemic while PPI just made a new cycle low, Australian unemployment ticked up, […]
Today wasn’t the best day for US economic releases. The 2nd revision of 1Q GDP was (unsurprisingly) revised down from 0.2% to -0.7%. The release that caught our eye, however, was the initial release of corporate profits in the US for the first quarter. After-tax corporate profits did rise by 2.7% year-over-year in the first […]
The 1,000 or so participants in Sentix’s monthly survey of whether or not a country will leave the euro collectively decided that the risk has subsided (slightly): The decline to 41% (from nearly 50% in April) was mostly attributable to risks related to Greece’s membership in the common currency (black line): Cyprus (in grey) was […]
The latest (March) Case-Shiller Home Price Index was released this morning and there were several noteworthy data points in the report. First, our 3-month diffusion index that measures the number of cities where prices are higher now than they were three months ago increased by six cities in March to a six-month high of 18. […]
In a new white paper released today, we identify a stock market anomaly. The Knowledge Effect is the tendency of highly innovative companies to deliver excess returns for investors. Academic researchers first discovered an association between a firm’s knowledge capital and its stock performance. Our research and index results suggest there is an opportunity for […]
Yesterday, we highlighted how equity trends have completely flip-flopped in April. Emerging market stocks have outperformed the developed market stocks, developed market energy is the best performer while developed market health care is the worst performer, etc.
The percent of stocks in the MSCI World Index that have had positive EPS revisions compared to six months ago currently stands at 45%. Over the past 7+ years, the average level of this statistic is 56%.
The second half of 2014 and the first month of 2015 (latest data available) shows a significant increase in total miles driven and total miles driven per capita. Total miles driven on an annual basis has reached an all-time high. The 2.12% year-over-year change is the largest YoY change in nearly 10-years (Feb 2005).
USD based investors should be wary of Canadian banks. Canadian banks have taken a beating in 2015 and the near-term trend doesn’t look to be abating anytime soon. The average USD performance of a Canadian bank year-to-date is a ”correction” worthy -13%.