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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 […]

Volatility | June 22, 2017

Posted on June 22, 2017

Volatility among tech companies has exceeded its long levels, following a period of stress on that segment of the market. These types of steep increases in risk aren’t unusual for tech bull markets since the market is expecting extremely elevated levels of growth to justify valuations. However, this is typically a bad sign for near-term […]

Correlation | May 3, 2017

Posted on May 3, 2017

Our Observations: Short-term correlations in bonds have gone negative, indicating that bonds are once again acting as the standard diversifiers to the basket. We think this is a good sign and may indicate a breakdown in policy-driven markets. The correlation figure measures how each asset return moves in relationship to the broader basket of asset […]

Correlation | April 26, 2017

Posted on April 26, 2017

Our Observations: Short-term correlations have been declining in nearly every segment of the market. This move is breaking up the somewhat lopsided market that had been driven by interest rates and inflation expectations and provides a potential opportunity for diversification. One of the more notable changes has been the decrease in correlations for U.S. bonds […]

Correlation | April 19, 2017

Posted on April 19, 2017

Our Observations: The price of the S&P 500 peaked on March 1st and has fallen nearly 3% while the U.S. Dollar has fallen 2% relative other major currencies. We believe this has created some unique inter-market changes, including a sharp rise in the short-term correlations (22-days) of gold and silver. Precious metals tend to be […]

Income Report Card | April 17, 2017

Posted on April 17, 2017

Our Observations: The 10-year Treasury yield fell from 2.38% to 2.24% over the past week, breaking out of the trading range it has held all year. We believe this likely signals the beginning of a correction that should favor less risky assets such as Treasurys and cash over riskier credit and stocks. However, we’ve noticed […]