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[PLUS] Weekly Observations & One Chart for the Weekend

April 16, 2021
JC Parets

From the desk of Willie Delwiche.

There was plenty of positive economic data this week, but the bounce in residential construction activity really caught my eye. This tends to be a leading indicator for the economy overall. Housing starts were particularly strong in March, surging to their highest level since 2006. This probably isn’t too much of a surprise for those who have been watching Lumber build on last year’s gains and move to new all-time highs this week. Not that I was trying to do channel checks during my break last week, but I did notice plenty of trucks on the road headed North and loaded with lumber and logs as I drove through Kentucky, Tennessee, and Alabama (though they are not yet to the point of traveling in convoys surrounded by a security detail).

Breadth Thrusts & Bread Crusts: Context Matters

April 15, 2021
JC Parets

From the desk of Willie Delwiche.

We were cooped up all winter, so we decided to head south. 

As soon as the kids got out of school for spring break, we loaded up the car, left Milwaukee, and headed for the Gulf of Mexico. 

It was a long trip -- and I had plenty of time to think along the way. In a world of momentum and trends, we want to remember where we’re coming from so we can better understand where we’re going.

[PLUS] Weekly Sentiment Report

April 13, 2021
JC Parets

From the desk of Willie Delwiche.

Key takeaway: Despite the decreasing exposure of active equity managers, the weight of the evidence continues to lean toward a neutral sentiment backdrop that supports a much needed reset, allowing optimism to rebuild moving forward. Investment managers may be pulling back from the market, but equity ETF inflows have reached record levels. This past month inflows reached over $80 billion, the highest level over a one month period. This may suggest excessive investor positioning but inflows can remain high for extended periods of time before negatively impacting the market. Another piece of information that points to growing optimism is The Consensus Inc. Bullish Sentiment Index as it reached 74% last week, it’s highest level since early 2018. These pockets of investor optimism, within the broader neutral setting, allude to the nature of the recent unwind.

Sentiment Chart of the Week: Sentiment Reset

[PLUS] Weekly Market Notes & Breadth Trends

April 12, 2021
JC Parets

From the desk of Willie Delwiche.

Key Takeaway: New highs bring out the bulls. Excessive optimism offset by broad market strength in the US & around the world. Despite Fed assurances of patience, rising bond yields will soon put pressure on the liquidity backdrop.

[PLUS] Weekly Top 10 Report

April 12, 2021
Steve Strazza

From the desk of Steve Strazza @Sstrazza

Our Top 10 report was just published. In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.

Bifurcation Looms In The Currency Complex

As the US Dollar has caught a bid in recent weeks, our custom equal-weight index of the G-10 currencies is finding resistance at a perfectly logical level. We’re receiving bifurcated signals from the currency complex all-in-all, as many risk-on currencies are approaching key inflection points. In saying this, the currencies that have held up the best during the Dollar’s recent bout in strength have been those more closely tied with commodity-rich economies. This adds credence to our global growth and Commodity Supercycle thesis.   

[PLUS] Weekly Momentum Report

April 11, 2021
Steve Strazza

From the desk of Steve Strazza @Sstrazza

Check out this week's Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level. By analyzing the short-term data in these reports we can take a more tactical view in order to better understand and gain insight into the structural trends at play.

Let's jump right into it with some of the major takeaways from this week's report:

* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.

Macro

Breadth Thrusts & Bread Crusts: Learning to Swing at the Fat Pitches

April 7, 2021
JC Parets

From the desk of Willie Delwiche.

Baseball is back -- another sign that life is returning to normal. 

I’m already thinking about heading to the ballpark to see the Brewers play in person (even though my son isn’t thrilled that they changed the name from Miller Park to American Family Field).

I wasn't much of a baseball fan growing up. In fact, I never progressed beyond Tee-ball. Washington didn't have a team at the time and rooting for the team from Baltimore seemed to be out of the question. After moving to Milwaukee as an adult, I was surprised to hear the actor from "Mr. Belvedere" calling the games on the radio. Little did I know that Bob Uecker, a Milwaukee legend, was a baseball guy first and an actor second. 

Despite my lack of on-field experience, I’ve enjoyed watching my son progress through the Little League ranks.

[PLUS] Weekly Sentiment Report

April 6, 2021
JC Parets

From the desk of Willie Delwiche.

Key takeaway: Despite the decreasing exposure of active equity managers, the weight of the evidence continues to lean toward a neutral sentiment backdrop that supports a much needed reset, allowing optimism to rebuild moving forward. Investment managers may be pulling back from the market, but equity ETF inflows have reached record levels. This past month inflows reached over $80 billion, the highest level over a one month period. This may suggest excessive investor positioning but inflows can remain high for extended periods of time before negatively impacting the market. Another piece of information that points to growing optimism is The Consensus Inc. Bullish Sentiment Index as it reached 74% last week, it’s highest level since early 2018. These pockets of investor optimism, within the broader neutral setting, allude to the nature of the recent unwind.

Sentiment Chart of the Week: Economic Activity and Risk Appetite