Tag Archive: S&P 500

Gold Out Performs Stocks In 2018 and This Century By Ratio Of Two To One

2018-04-14

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2018-04-14

Gold Price, 1999 - 2018
– Gold outperforming stocks in 2018 and this century (see chart) – Gold up close to 2% in 2018 while S&P 500 is down 2% – Trump trade wars and Kudlow as Trump chief economic advisor is gold bullish – Given gold’s performance, Kudlow’s dismissal of gold as “end of the world insurance” is “irrational” – Market volatility could drive gold to $1,500/oz in 2018 – Holmes

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US Equities – Mixed Signals Battling it Out

2018-03-10

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2018-03-10

S&P 500 New High Lows Percent, Feb 2015 - Apr 2018
Readers may recall that we looked at various market internals after the sudden sell-offs in August 2015 and January 2016 in order to find out if any of them had provided clear advance warning. One that did so was the SPX new highs/new lows percent index (HLP). Below is the latest update of this indicator.

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Never Mind Volatility: Systemic Risk Is Rising

2018-03-07

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2018-03-07

S&P 500, 2008 - 2018
So who's holding the hot potato of systemic risk now? Everyone. One of the greatest con jobs of the past 9 years is the status quo's equivalence of risk and volatility: risk = volatility: so if volatility is low, then risk is low. Wrong: volatility once reflected specific short-term aspects of risk, but measures of volatility such as the VIX have been hijacked to generate the illusion that risk is low.

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“This Is Where They Completely Lost Their Minds” – Hussman

2018-02-11

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2018-02-11

Valuation
“This Is Where They Completely Lost Their Minds” – Hussman. Hussman warns ‘the S&P 500 to lose approximately two-thirds of its value over the completion of this cycle’. ‘the market has lost value, even since 2009, when overvalued, overbought, overbullish conditions were joined by divergent internals’. Believes the market is going to learn lessons about the crash ‘the hard way’.

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Gold Hits All-Time Highs Priced In Emerging Market Currencies

2018-01-13

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2018-01-13

Gold Prices in Emerging Markets Currencies, 2010 - 2018
Gold Hits All-Time Highs Priced In Emerging Market Currencies. Gold at all time in eight major emerging market currencies. A stronger performance than seen when priced in USD, EUR or GBP. As world steps away from US dollar hegemony expect new gold highs in $, € and £. Gold is a hedge against currency debasement and depreciation of fiat currencies.

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How the Asset Bubble Could End – Part 2

2017-12-23

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2017-12-23

Special antennae
There is just one more positioning indicator we want to mention: after surging by around $126 billion since March of 2016, NYSE margin debt has reached a new all time high of more than $561 billion. The important point about this is that margin debt normally peaks well before the market does. Based on this indicator, one should not expect major upheaval anytime soon. There are exceptions to the rule though – see the caption below the chart.

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The Stock Market and the FOMC

2017-12-16

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2017-12-16

Dow Price in Dollars and Gold, 1800 - 2017
As the final FOMC announcement of the year approaches, we want to briefly return to the topic of how the meeting tends to affect the stock market from a statistical perspective. As long time readers may recall, the typical performance of the stock market in the trading days immediately ahead of FOMC announcements was quite remarkable in recent decades. We are referring to the Seaonax event study of the average (or seasonal) performance across a...

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Year-end Rate Hike Once Again Proves To Be Launchpad For Gold Price

2017-12-15

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2017-12-15

Year-end rate hike once again proves to be launchpad for gold price. FOMC follows through on much anticipated rate-hike of 0.25%. Spot gold responds by heading for biggest gain in three weeks, rising by over 1%. Final meeting for Federal Reserve Chair Janet Yellen. Yellen does not expect Trump's tax-cut package to result in significant, strong growth for US economy. No concern for bitcoin which 'plays a very small role in the payment system'.

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Silver’s Positive Fundamentals Due To Strong Demand In Key Growth Industries

2017-12-08

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2017-12-08

Silver Price in USD, Jan 2013 - 2017
Silver’s Positive Fundamentals Due To Strong Demand In Key Growth Industries. Increased efforts in green energy and advanced technology set to boosts silver’s demand. Four-year supply deficit set to increase due to fewer mine openings and discoveries. Bank manipulation may be why silver under performing. TD Securities and the Bank of Montreal expect silver to be best performing precious metal in 2018.

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Global Asset Allocation Update

2017-12-02

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2017-12-02

Moderate Allocation
There is no change to the risk budget this month. For the moderate risk investor the allocation to bonds is 50%, risk assets 45% and cash 5%. The extreme overbought condition of the US stock market did not correct since the last update and so I will continue to hold a modest amount of cash.

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The Savings Rate Conundrum

2017-11-08

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2017-11-08

Median Disposable Income and Debt Ratio, 1967 - 2015
The economy is booming. Employment is at decade lows. Unemployment claims are at the lowest levels in 40-years. The stock market is at record highs and climbing. Consumers are more confident than they have been in a decade. Wages are finally showing signs of growth.

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Global Asset Allocation Update

2017-11-05

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2017-11-05

Moderate Allocation
The risk budget this month shifts slightly as we add cash to the portfolio. For the moderate risk investor the allocation to bonds is unchanged at 50%, risk assets are reduced to 45% and cash is raised to 5%. The changes this month are modest and may prove temporary but I felt a move to reduce risk was prudent given signs of exuberance – rational, irrational or otherwise.

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Where To Invest When (Almost) Everything’s in a Bubble

2017-11-02

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2017-11-02

S&P 500 and US Home Price Index, 1980 - 2017
Many things that are scarce and thus valuable cannot be bought on the global marketplace. Now that almost every asset class is in a bubble, the question of where to invest one's capital has become particularly vexing. The ashes of wealth consumed by the 2008-09 Global Financial Meltdown are still warm, at least to those who never recovered, and so buying assets at nosebleed valuations in the hopes of earning another 5% aren't very compelling to...

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Key Charts: Gold is Cheap and US Recession May Be Closer Than Think

2017-10-23

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2017-10-23

Average Annual Gold Price in USD, 1971 - 2017
Every year, Ronald-Peter Stoeferle and Mark J Valek of investment and asset management company Incrementum put together the report In Gold We Trust – 160-plus pages of charts and thoughts, mostly gold-related, on the state of the world’s finances. There’s so much to look at and consider. It’s a sort of digital equivalent of a coffee-table book.

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Can We See a Bubble If We’re Inside the Bubble?

2017-06-25

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2017-06-25

Mental Map
If you visit San Francisco, you will find it difficult to walk more than a few blocks in central S.F. without encountering a major construction project. It seems that every decrepit low-rise building in the city has been razed and is being replaced with a gleaming new residential tower.

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Global Asset Allocation Update:

2017-06-24

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2017-06-24

Moderate Allocation
There is no change to the risk budget this month. For the moderate risk investor, the allocation between risk assets and bonds is unchanged at 50/50. There are no changes to the portfolio this month.

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