Europe’s GRANOLAS Stocks and Market Capitalization While Europe may not have the Magnificent Seven, it does have the GRANOLAS, which represents Glaxosmithkline, Roche, ASML, Nestle, Novartis, Novo Nordisk, L’Oreal, LVMH, Astrazeneca, SAP, and Sanofi. Image:…
Stocks – Cyclicals vs. Defensives Cyclicals and defensives are useful indicators of investor sentiment. As investors expect economic contractions, they often shift towards defensives, resulting in their outperformance compared to cyclicals. Image: Goldman Sachs Global…
U.S. Stocks – Average Stock Correlation in the S&P 500 The current trend in the S&P 500 indicates a significant rise in stock correlation, suggesting a more homogenous market behavior that could pose risks for…
G10 FX Carry Trade Index The Bank of Japan’s recent actions caused market turmoil termed an “ugly deleveraging event,” reflecting ongoing economic challenges in Japan. Navigating a post-deflationary landscape adds complexity to the situation. Image:…
The Federal Reserve and Financial Crisis While the current rate hiking cycle hasn’t caused widespread financial crises yet, it’s premature to say it’s entirely different. The Fed must carefully balance controlling inflation, achieving maximum employment,…
High Yield Bond Flows Persistence outflows from high yield bonds could signal a lack of confidence in the underlying companies and their capacity to fulfill debt obligations, making it a crucial indicator to monitor closely.…
Bank Loan Flows The largest outflow from bank loan funds since March 2020 can be seen as a negative development and reflects negative investor sentiment. Image: BofA Global Investment Strategy
S&P 500 Forward 6-Month Performance vs. VIX Level Very high VIX readings may actually precede periods of strong market performance over the subsequent 6 months, as investor sentiment stabilizes and confidence returns. Image: Strategas Research…
Sentiment – Global Risk Demand Index The Morgan Stanley Global Risk Demand Index indicates that investors’ risk appetite is very low, which can often be seen as a contrarian indicator, where extreme pessimism might signal…
Fed Funds vs. VIX Taking into account the lag effect of Fed rate hikes on the U.S. economy, should investors expect the VIX to continue being elevated? Image: Deutsche Bank
U.S. ISM Manufacturing Index and Recessions The U.S. manufacturing sector is currently experiencing its second longest downturn in modern history, attributed to various factors, including elevated interest rates that have suppressed demand. Image: BofA US…