European Economic Policy Uncertainty


With headlines like ’Plans for Political Union Unravel’ (WSJ) and ’Draghi’s Blunt Warning on Bank Stress Test’ (FT), policy (or, rather, lack of a coordinated one) appears poised to exert its influence on European equities once again:Combined with somewhat weaker economic and sentiment-related data releases, as well as overbought and extended technical patterns, can European

A Not So Random Walk in 2013


Everyone that’s read Burton Malkiel’s A Random Walk Down Wall Street learns the idea that the movement of stocks is random–they can rise or fall on any given day.  Like a hitter in baseball or a shooter in basketball, players can go on ”runs” that temporarily give the appearance of non-randomness.

Rally Like It’s 2009


We perform a variety of calculations to understand the often imperceptible changes in the underlying structure of the stock market.  One calculation we make is to measure the percent of stocks making a new 200-day high.  Historically this metric gets the most extended during the first move off a major low–like in September 2009.

Employment in the US & Stock Valuations


For the last 40 years, the employment to population ratio has been well correlated with equity valuations.As would make sense, when more people are working, income is higher, demand is more sustainable and investors rationally capitalize corporate earnings at a higher rates.  When employment rates are low, the opposite happens.