Archive | May, 2016

Are Analyst Growth Expectations Finally Lining Up With Reality?

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Next 12 month (NTM) median sales and earnings expectations for US companies have improved since earlier this year, however, a structural shift in expectations may be taking place. From 2002-2007, NTM median sales growth expectations averaged 7% and median EPS growth expectations averaged 13%. Obviously, expectations plunged during the financial crisis but growth expectations did […]

Commercial Traders Are Very Short Gold & Silver

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The latest (5/6) commitment of traders report showed some extreme net commercial positions for both gold and silver. Commercial traders are net short nearly 300k contracts of gold. This is the largest net short position since October 2010. Even as gold is off about 2% today, the net short position in gold should be viewed […]

XLE is at an Inflection Point

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XLE, the SPDR Energy ETF, is the most popular energy ETF as it has nearly $14 billion dollars in net assets. After falling by 50% from mid-2014 to early 2016, XLE has rallied by 30% since January 22nd.  XLE is made up of of 39 stocks but is dominated by the the largest energy companies […]

Looking For Safety? Consumer Staples Have Provided It

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Let’s begin with the strongest current case against consumer staple stocks: they are expensive! Regardless of the valuation metric one picks, DM consumer staple stocks are trading near, at or above 2000 and 2007 levels. From a theoretical standpoint, the fact that consumer staple stocks are so expensive is counter-intuitive given that we have had historically low interest […]

Has the Long Yen Trade Run its Course?


Despite an unprecedented amount of monetary easing taking place at the Bank of Japan, the yen has since the middle of 2015 been on a consistently strengthening trend versus the USD. As paradoxical as it may seem in a period when the Fed talked about, and then did raise interest rates coincident to the BOJ firing […]

4 Charts From April’s ISM Manufacturing Report

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April’s ISM manufacturing report came in slightly below expectations. Economists were expecting the headline index to post 51.4 in April and instead it came in at 50.8, down from 51.8 in March. While the headline index slightly disappointed, we are beginning to see signs of improvement in prices, production and trade. The prices paid component […]