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.
China Dictates The Direction Of Many Diversified World Indexes
On a global scale, recent weakness has primarily been isolated to the Asia-Pacfic region. This region has in large part been weighed down by the Large-Cap Growth-heavy Chinese market; while many indices have decisively accelerated to the upside in recent months, China is still painfully below its YTD highs.
From our perspective, given the economic significance of China, we need to see buyers defend this key 45 level in the iShares China Large-Cap ETF. In this sense, the resolution from this level will likely dictate the bias for global markets in the coming weeks and months.
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.
The Growth Vs Value Cheat Code
We’ve pounded the table about that 1.70 level being the line in the sand for the relative trend in Growth vs Value. If we’re below there - which we believe we’re likely to remain, then we want to continue to be overweight Value and cyclicals. If the ratio decisively reclaims this level then we’ll have to rethink our entire thesis, along with that of a new Commodities Supercycle. But, that’s not the bet we’re making at all.
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.
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.
How Dangerous Are These Divergences?
Let’s play a little devil’s advocate. Do you know what a common characteristic of market tops is? Failed breakouts. We see them everywhere at significant peaks - just look back to February of last year, there were plenty of textbook examples. The Russell 2000 just printed a failed breakout and confirmed a bearish momentum divergence as price sliced below its February highs. Making matters worse, RSI couldn’t even register an overbought reading with the most recent highs.
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.
1. Dow Averages Take The Driver Seat
At the index level, the Large-Cap Growth-heavy Nasdaq has felt the burden of the last month’s selling pressure. In fact, all other major indices in the US have generated positive returns over the last month. The Nasdaq is the one negative standout. It’s not that we’re seeing money flow out of stocks. Instead, we’re seeing money rotate between stocks.
Our Top 10 report was just published; our weekly report highlighting the best 10 ideas and respective charts we are seeing across the markets this week.
Our Top 10 report was just published; our weekly report highlighting the best 10 ideas and respective charts we are seeing across the markets this week.
Our Top 10 report was just published; our weekly report highlighting the best 10 ideas and respective charts we are seeing across the markets this week. One idea and chart that really has our attention is Emerging Markets overlaid with The CRB Index.
Emerging Markets hit new all-time highs last week. This is supportive of the bullish action we’re seeing from stocks in other regions of the globe as well as economically-sensitive commodities. It is no coincidence that the Emerging Markets ETF $EEM and the CRB index tend to peak and trough in unison throughout history. They relay a similar message of “risk-on.” The big question now is whether it’s time for Commodities to play catch-up with Emerging Markets.
