In a September update, we noted that indices, like the NASDAQ and S&P 500, were reaching new highs, but only a small number of the mega-cap stocks were contributing to the overall index performance.  In late November, we noted that market breadth was improving in the U.S. and internationally.  One of the drivers of...Read More

Earlier this month, we noted that based on futures and options data, investors were still hedging their positions and were not fully allocated for a large recovery year-over-year (YOY) in economic growth and corporate profitability.  Another way we try to measure and monitor this is by looking at trailing volatility.  There are a large, growing...Read More

  We have been reiterating that investors and market prices continue to focus on the pending recovery in economic and corporate earnings growth in 2021 and have been looking past any weakness in Q4 2020 and early 2021 data.  Last week was an example of this.  The economic data that was released showed a slowing...Read More

  The S&P 500 Index ended 2020 by increasing 13% over the final two months.  Cyclical industries like Energy and Financials outperformed while defensive industries like Utilities, Real Estate, and Staples lagged.  We have mentioned in several of our recent posts (here, here, here), that as long as the U.S. economy remains on the path...Read More

  In a prior post, we discussed some of the monetary and fiscal policy tools that have been implemented in Japan and Europe and how they have not been able to generate the inflation levels targeted by their respective central banks.  Alhambra Investments put together the graphs below showing the increase in the size of...Read More

  Recently, we have been noting how strong investment markets have been performing, led by cyclical, economically sensitive areas.  This is occurring at a time when COVID-19 related data (cases, positivity rates, hospitalizations, and deaths) in the U.S. are at or near the highest levels since the pandemic started, which is prompting policy makers to...Read More

  We track a variety of market and macro factors to determine how the economy is progressing and signs that the cycle is shifting.  One important factor in determining regime shifts is cross asset class volatility. We look at volatility across various geographies and assets classes to determine if there is a broad-based increase or...Read More

  Last week, we highlighted that gross domestic product (GDP) and inflation are likely to accelerate year over year in 2021, which could be driving investors to overweight cyclicals and inflation sensitive assets.  We originally noted the performance of COVID sensitive areas like airlines, cruise ships, restaurants, hotels, malls, and department stores that should benefit...Read More

  Last week, Pfizer announced some promising news regarding their COVID-19 vaccine trial (as did Moderna this week).  Some of the hardest hit areas like travel, leisure, entertainment, energy, and restaurants were up 20-40% based on the news.  Many of them later gave back some of that rally during the rest of the week as...Read More

  In a prior post, we discussed the importance of the service sector to developed market economies and how gaining control over the virus was the most important near-term catalyst to achieving an improved growth rate.  We can see evidence of that by looking at some of the market and economic data from Asian countries...Read More