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Ariana

Month: May 2018

George Soros Warning

From Project Syndicate Link The European Union is mired in an existential crisis. For the past decade, everything that could go wrong has gone wrong. How did a political project that has underpinned Europe’s postwar peace and prosperity arrive at this point? In my youth, a small band of visionaries led by Jean Monnet transformed the […]

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Italy / diverging system

Simply put, the natural return-to-the-mean dynamic between Italy and Germany has ceased, causing their economic systems to diverge rather than converge. Hence, anyone buying Italian over German stocks is betting on a world first—that this system will self-correct despite a fixed exchange rate joining economies with quite different productivity levels. In fact, this has only […]

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DAILY DATAPOINT 25th May 2018

We are closely watching the state of the US consumer as oil prices continue to rise but aren’t ready to sound the macroeconomic alarm just yet. That will come when we see WTI prices increase by more than 100% in a year, a percentage gain that has proved problematic in the past. If you want […]

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MARKET RECAP 18.05.2017

US equities continued to retreat on Friday amid concerns about the outcome of a trade deal between the US and China. Large caps lagged small caps: S&P 500 (-0.26%) vs. Russell 2000 (+0.08%). Financials (-0.91%) and energy (-0.81%) underperformed the broader market indices, while industrials (+0.55%) and healthcare (+0.27%) outperformed. Boeing (+2.06%) and Caterpillar (+1.31%) […]

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DAILY DATAPOINT

Fun fact: the VIX has only doubled in one day once since it was created in 1990. Most people may guess it happened during the financial crisis or even when the dot com bubble burst, but they’d be wrong. It actually happened earlier this year! No it was not the collapse of the housing market […]

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MARKET RECAP 17.05.2018

US equities retreated on Thursday after President Trump said he doubts that his trade talks with China would succeed. Large caps lagged small caps: S&P 500 (-0.09%) vs. Russell 2000 (+0.55%). Utilities (-0.90%) and telecommunications (-0.56%) underperformed the broader market indices, while energy (+1.31%) and industrials (+0.30%) outperformed. Cisco (-3.76%) and Walmart (-1.90%) weighed on […]

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Will Powell raise or not

Here are the market-based measurements we watch most closely on these two issues: 1) Fed Funds Futures past December 2018 Current futures market pricing assumes the Fed will end this year with rates at 2.2%, which in practical terms means the aforementioned 3 rate bumps over the balance of 2018. Going out past 2019, the […]

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The yield curve

The yield curve is a decent proxy for the relative future return of long-duration and short-duration bonds. When the yield curve is steep, it makes sense to take the higher volatility-risk of long-duration bonds, as investors are compensated by higher returns. However, when the yield curve is flat investors are better off holding short-duration bonds […]

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MARKET RECAP 16.05.2018

US equities rallied on Wednesday amid strong corporate earnings results. Macy’s (+10.83%) exceeded quarterly earnings forecasts and said same-store sales increased by a more than expected 4.2%. Large caps lagged small caps: S&P 500 (+0.41%) vs. Russell 2000 (+1.00%). Materials (+1.15%) and consumer discretionary (+0.83%) bested the broader market indices, while utilities (-0.86%) and real […]

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DAILY DATAPOINT

I looked at the recent performance of US large cap Consumer Staples, because it has been simply dreadful. A few stats: YTD: Staples down 12.7% versus +1.8% for the S&P 500 Q2 2018 to-date: -5.6% versus +3.1% for the S&P 500 One year: -9.6% versus +13.9% So what exactly is in this worst-of-all-possible-worlds slice of […]

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US Trading Prep 17.05.2018

Index Futures Net Changes and Settlements: ContractSettlementNet Change+/-%S&P 500 (ESM18:CME)2723.00+14.00+0.51%DowJones (YMM18:CBT)24,740+80+0.32%Nasdaq 100 (NQM18:CME)6937.25+46.75+0.67%Russell 2000 (RTYM:CME)1619.10+17.30+1.06% Foreign Markets, Fair Value and Volume: In Asia 7 out of 11 markets closed lower: Shanghai Comp -0.48%, Hang Seng -0.54%, Nikkei +0.53% In Europe 9 out of 13 markets are trading higher: CAC +0.38%, DAX +0.28%, FTSE +0.25% Fair […]

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China’s Market

After years of “Will they? Won’t they?” back and forth, on June 1, 234 of China’s domestically-listed A-shares will be included in the MSCI Emerging Markets index. The immediate inflows driven by this move will be small, amounting to roughly US$13bn in 2018. Nevertheless, the inclusion of China’s onshore stock markets in the MSCI EM […]

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