Archive | January, 2017

Quarterly Update: Knowledge Leaders Strategy

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In our new quarterly update report, Portfolio Manager Steven Vannelli, CFA, discusses the investment team’s recent analysis on two topics, including: 1. New portfolio opportunities. Huge innovation in the energy sector – and the US Shale Revolution specifically — has manifested into new portfolio opportunities. The US cost of production of oil has fallen by 50% over […]

Inflation is Finally Surprising to the Upside But it Looks Like it’s All About Oil Prices

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For the first time since 2011-2012, inflation surprises are positive in many parts of the world.  The Citi Inflation Surprise Index is at the highest level since 9/2011 in Asia-Pacific, it’s at the highest level since 10/2011 for the Eurozone, and it’s at the highest level since 5/2012 in the emerging markets. One notable exception is […]

Brent-WTI Spread Widest in Months, More to Come?


Weekly field production of crude oil in the US averaged a steady ~15%yoy growth from the beginning of 2012 until mid-2015. That rate dropped into negative territory as production declined an average of ~2%yoy in the last year and a half. Advances in drilling technology over the last several years, detailed in geopolitical strategist Peter […]

Short Interest on NYSE Fell by 20% in 2016


As of the end of December, short interest–the number of shares investors have sold short on the NYSE–dropped to its lowest level since early 2014, even as stock market indices hovered at new highs. Similar declines in the level of short interest occurred in 2009, 2010, and 2012. We looked at similarly relaxed behavior as it […]

VIX Flirting with Pre-GFC Lows, Uncertainty at All-Time Highs. Huh?


Recently, we have highlighted a number of divergent trends between ‘soft’ data and ‘hard’ data in both Europe and the US. For the most part, improving survey responses remain unconfirmed by the quantifiable information currently available. The surge in the economic policy uncertainty index is no exception. In 2016, uncertainty rose around the world, led […]

The Implications of Speculations


The latest Commitment of Traders report (as of last Friday) highlights some extreme levels of speculation in several different assets. Positioning in currency futures is supportive of a strengthening in the EUR, GBP, and JPY versus the USD as net long positions in the dollar moderate somewhat in the coming months. With respect to commodities, […]

Optimism Is Soaring For Small Business Owners

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The latest NFIB Small Business Survey was a blow out report if there ever was one. Small business optimism increased to 105.8 in December from 98.4 in November and well above expectations of 99.5. The headline is at the highest level since 2004 and the one month increase is the largest on record. The surge […]

Lower Quality Stocks Have Led the Market Over the Past 3 Months

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‘Quality’ is one of the those terms in finance that if you ask three different investors to define you get four different answers. Generally, however, companies with higher profitability, lower debt, and higher sales growth are considered to be higher quality companies. Lower quality companies tend to have the opposite characteristics. Over the past three […]

European Economic Sentiment Data at a Nine-Year High


EU economic sentiment data beat expectations in December and rose to levels not seen since 2007. Business confidence led the overall increase with rises in both the industrials and services sectors. A simple diffusion index of this data tracks the breadth across the Euro Zone (19 countries) and the European Union (28 countries). In both cases, […]