- Entering 2022, Real Estate, Technology, Health Care and Consumer Staples hold down the top spots in our S&P 500 sector relative strength rankings.
- Our industry group-based heat map shows deteriorating conditions across Energy and Financials and improving conditions in Staples and Utilities. Leadership from defensive groups is not usually consistent with risk-on behavior.
[PLUS] Weekly Town Hall w/ Willie Delwiche
This is the video recording of the December 22nd Weekly Town Hall w/ Willie Delwiche
12/22/21 2:00 PM ET [Read more…]
[PLUS] Weekly Sentiment Report
From the desk of Willie Delwiche.
Key Takeaway: The sentiment backdrop is more characterized by a lack of optimism than widespread pessimism. This is in sharp contrast to the experiences of December 2020 and 2019. In those instances, too much holiday cheer led to hangovers in the year that followed (don’t forget, new highs peaked early in 2021 and many areas have been a sideways mess for months now). The current sentiment backdrop is not dissimilar to (though less extreme than) what was experienced in December 2018. Intense selling that month had investors thinking more about the Grinch than Santa Claus. While probably won’t get widespread pessimism this time around without further volatility – but if we do and investors throw in the towel on stocks, it could ultimately help light a fire that leads to early year breadth thrusts like what we experienced in early 2019.
Sentiment Report Chart of the Week: Households Are Loaded Up On Equities
Quarterly data from the Federal Reserve shows that asset allocation at the household level shows a historically high tilt toward equities and away from bonds. There are certainly quarter-to-quarter variations, but the inverse relationship between the stock/bond ratio and forward returns for the S&P 500 is, over time, about as tight as they come. Households loading up on stocks (in terms of flows and overall levels) tends to be a headwind for returns.
[Video] Options Holiday Party – Tuesday December 28th
Join Sean and JC on Tuesday December 28th at 4:30 PM EST for our Options Holiday Party Livestream!
Don’t miss this quick video below where Sean previews the event.
[PLUS] Weekly Risk Perspectives – Tactical Signals Turn Cautious
Key Takeaways:
- Tactical model argues for caution heading into 2022
- Absence of a breadth thrust leaves market looking for energy elsewhere
- Liquidity indicator remains supportive but Macro Sentiment and Breadth point to rising risks
There was a story in the WSJ earlier this year about a fund manager who held 900 of his best ideas in his main mutual fund. I saw a model this summer that was made up of nearly 100 individual momentum indicators. Some will use a double-digit number of categories for gauging the market. One more holding, one more indicator, one more lever – it’s as easy as adding one more column in the spreadsheet. If more is better that is great, the question though is at what point is more just too much.
Information, even when useful, can easily pile up and become overwhelming. This adds to, rather than reduces noise. Distillation is an ongoing challenge in this age of distraction. There is a tension between focusing on as much as we need to, but as little as we have to. This can matter to investors facing the prospect of wading through 2022 outlook pieces filled with forecasts, expectations and a myriad of moving parts. I’d rather focus on just a few (less than a handful) of indicators for identifying risk and opportunity next year. I expect they will matter in 2022 because they have mattered most of the time in recent years.
[PLUS] Weekly Market Notes & Breadth Trends
- After last week’s big jump from Consumer Staples (which held in at #4 this week), it was Utilities making a big move (from #9 to #6) in the rankings. Defensive groups are seeing strength on an absolute basis (more on that in a moment) and that is translating into higher sector rankings and improving conditions at the industry group level.
- Real Estate has taken over the top spot in the rankings while cyclical sectors seem to be in a race to the bottom.
[PLUS] Weekly Observations & One Chart for the Weekend
From the desk of Willie Delwiche.
The Fed is turning off the liquidity spigot and expects to start raising interest rates next year. There are plenty of historical studies showing the relatively benign impact of the first one or two rate hikes. This cycle, though, will be a bit different than what has been experienced in the past. Historically, the Fed is leading the way with interest rate hikes, moving toward tightening ahead of other global central banks. The muted impact of those initial rate hikes may be partly due to the fact that most central banks have still been accommodative. That is not going to be the case this time around. Nine central banks have raised their interest rates in December alone and by the time the Fed makes its first move, a majority of central banks will likely be tightening.
[PLUS] Weekly Town Hall w/ Willie Delwiche
This is the video recording of the December 16th Weekly Town Hall w/ Willie Delwiche
12/16/21 2:00 PM ET [Read more…]
- « Previous Page
- 1
- …
- 41
- 42
- 43
- 44
- 45
- …
- 79
- Next Page »