Relative Rotation Graph and U.S. Bonds
In this video, I show the U.S. Bond categories in a relative rotation graph. We have seen some interesting leadership develop.
COVID-19 and the Stock Market
Stock markets are in a tailspin this morning due to COVID-19 concerns. The stock market has dealt with many epidemics (SARS, MERS, Bird Flu, Ebola, etc.) in the past few decades none of which have led to a sustained market decline. Here is a look at the historical market returns 6 & 12-months after the occurrence of […]
Collateral Damage
I have become aware of new information about what may be preventing the REPO market from operating properly. Despite emergency Fed intervention, the REPO market continues to have trouble meeting cash demands. It may not be a liquidity problem after all, it appears to be a problem with collateral. The following example from Fed Governor […]
Dightman Capital – Q4 Outlook
U.S. stocks have experienced a strong recovery in 2019 but the increase in volatility the last several months is a concern. If stock indexes can hold current gains, they will deliver solid double-digit returns for the year despite sputtering trade progress with China and political turmoil in Washington DC. While political developments can lead to […]
A Divided Market
There are clearly opposite views on the market right now. After a fabulous day for all three indexes yesterday, not to mention the performance of many leading stocks, some commentators remain committed to the idea we are headed for a recession. A week ago, recession fears were plastered on the front pages of all the […]
Stocks Turn Bearish
The investment environment continues to deteriorate despite the pickup in economic activity in the U.S. the last couple of years. As the Big Four Indicators I highlighted recently show, the U.S. economy continues to move in the right direction. Despite the U.S. economy doing well, international economies are performing poorly with few catalysts outside of […]
The Grind To Lower Valuations
Let’s think about the future for a moment. After all, that is what the stock market is doing constantly. Up to this point in 2018, the stock market has had a very positive view of the future. Why wouldn’t it? Corporate sales and earnings growth have delivered in the strongest economy since 2008. In addition to an […]
Are Cracks Forming in the High-Yield Bond Market?
While high-yields bonds (HYG) have held up better than equities, there are signs of cracks forming. Negative developments at GE have caused some to speculate more highly leveraged borrowers are looking at downgrades. The lower tiers of investment grade ratings currently represent a large number of bonds and if we see a series of downgrades […]
Will Higher Interest Rates Derail Stocks?
Continued economic growth has led the Federal Reserve to raise the Fed Funds rate to 2.25%. This is the biggest issue facing asset markets right now even though the rate remains well below levels that led to recessions twice during the last 18 years. For that reason, I believe the Fed is going to be cautious […]
2018 Investment Strategy Review
Stock and bond market performance has been more volatile in 2018. After an amazing run in 2017 stocks have become more sensitive to interest rate hikes and potential disruptions in global trade because of ongoing trade negotiations by the Trump administration. Bonds too have seen an increase in volatility as the Federal Reserve increases the […]
