Market Cycles

Small Cap Rout Is Flashing Red Flag For US Economy

The post-election small cap bounce in US stocks has now been completely erased as it seems tax-reforms have now been entirely priced-out of markets. However, as BofAML notes, the demise of small cap stocks relative to the broad market augurs badly for forward-looking economic growth...

The Death Cross Of Central Bank Credibility

With no expectations of a rate-hike this week, and traders rapidly giving up on The Fed's dream of a steadily higher rate trajectory, a funny thing happened in the markets...

Hindenburg Omen Reappears As Main Market Supports Get Kicked Away

In the last week, the controversial Hindenburg Omen has started to cluster ominously once again. Combined with divergent market internals and rates off the zero-bound (and global central bank balance sheets actually shrinking), John Hussman warns of the rising likelihood of an interim market loss on the order of 50-60% over the completion of the current cycle.

Do Low Rates Really Justify Higher Valuations?

Do low-interest rates justify high valuations? History suggests not. It is likely a trap which will once again leave investors with the four “B’s” following the next recession – Beaten, Battered, Bruised and Broke.

The Witching Hour For US Stocks

When you layer on the current low volatility environment a scenario pops up: one with an equity market that very quietly returns 5-8% with very little price fluctuations.  Yes, in the past that scenario would pull investors into the fray and make for an artificially overvalued market, and then a fall. But the current crop of investors has been around for 3 notable bubble bursts: dot com, housing, and Financial Crisis. Will they get sucked in again?

Scientific Proof ETFs Make Markets Dumber

"Our evidence suggests the growth of ETFs may have (unintended) long-run consequences for the pricing efficiency of the underlying securities."

What NATO Must Do To Remain A True Alliance

The previous US administration criticized NATO at times but in such a way that the complaint was never taken seriously. The new administration cannot afford for this demand to not be taken seriously. From a US strategic view, the status quo is unacceptable...

When Speculators Prosper Through Ignorance

"Speculators often prosper through ignorance; it is a cliche that in a roaring bull market, knowledge is superfluous and experience is a handicap. But the typical experience of the speculator is one of temporary profit and ultimate loss."