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Volatility | July 20, 2017

Posted on July 20, 2017

Short- and long-term volatility are converging, another indicator that this is a market in a state of confusion. Despite rising volatility, it is still well below historical averages. We think this still provides a good environment for risk assets to perform well. The old Wall Street adage, “Stocks climb a wall of worry”, seems quite appropriate here. […]

Correlation | July 19, 2017

Posted on July 19, 2017

Near-term and long-term correlations are converging, but are still below historical averages. As a result, we think there are many potential options for positive performance through the selection of risk-diversifying assets and individual names. In short, we still see this as a stock picker’s market. The correlation figure measures how each asset return moves in […]

Momentum | July 18, 2017

Posted on July 18, 2017

Our Observations: Nearly every asset class is close to 0 in near-term returns, indicating that the market continues to be in a state of confusion. A strong push in emerging markets helped reverse the course of near-term momentum. When combined with strong long-term momentum, emerging markets appear to maintain their position as leaders among stocks. Momentum […]

Income Report Card | July 17, 2017

Posted on July 17, 2017

The 10-year treasury yield closed at 2.35%, down 0.04% from last week. However, this is a reprieve from what was a sharp rise last week. The rise in yields was accompanied by positive stock performance as it appears many investors may have put their fears of various global and political issues behind. This yield is […]

Volatility | July 13, 2017

Posted on July 13, 2017

Our Observations: Short-term and near-term volatility are nearly at parity in every asset class. We think we may be entering a period that is usually weak for stocks, where the increase in volatility might simply be an acknowledgement of that case. However, as of right now we still see there is very little evidence supporting the […]

Correlation | July 12, 2017

Posted on July 12, 2017

Our Observations: Correlations are very low in nearly every asset class. This is a little bit surprising given the volatility of the bond market, which should be signaling other parts of the market, but that doesn’t appear to be the case. However, we think it would be smart to keep an eye out for correlations […]

Momentum | July 11, 2017

Posted on July 11, 2017

Long-term momentum in sovereign debt collapsed over the past few weeks as key policy officials in Europe, Canada and the United Kingdom openly discussed the need to begin tightening rates. With negative long-term and short-term momentum, the bond environment appears to be weak. We think this could help push some out further on the risk […]

Income Report Card | July 10, 2017

Posted on July 10, 2017

The 10-year treasury yield ended the week at 2.39%, in what has been a dramatic period for global bonds. The yield is approaching the May 2017 high of 2.42%. If it is able to push past that high then we think the market may be pivoting back toward a reflation theme. However, much of the […]