Yesterday the VIX, colloquially known as the “Fear Index”, closed above a critical level. 50. This marks an important milestone and crossroads for markets given the recent AI bubble/tariff-induced downswing and volatility. During the last two recessions, the first day the VIX closed above 50 (i.e. while VIX was “on the way up” and markets …
The phrase “house of cards” conjures images of many things (aside from, in the most literal sense, an actual house of cards) including instability, fragility, and a lack of permanency. From a birds-eye view, the US housing market does not immediately conjure these images. Some houses are flying off the market, bidding wars still exist, …
A complex financial “phenomenon” that used to concern only those who were prone to chatting about things like the Federal Reserve and the yield curve at dinner parties, has seeped its way into the limelight with the public. By the title, you have likely guessed this “phenomenon” is inflation. Inflation is abstract, confusing, complex, and …
As we write this, equity markets are ripping higher, with the SPX up nearly 5.5% on the day. The general consensus seems to be that the worst is well in the rearview mirror and the horizon has only sunshine and rainbows. The near unanimous view on this is, well… worrisome. Everyone expects and assumes that …
It’s difficult to come up with something to say, other than “wow”. The S&P closed down 135 points or -4.4% for the largest point decline in history (Figure 1). First and foremost our timing of “neutral” stance could not have been worse (it happens). So take the “do as we allocate, not as we say …
The S&P 500 keeps chugging higher and higher, seemingly with no end in sight. It’s been more than 72 trading days without a 1% pullback and the basket of stocks recently traded at a ratio of 2.42 price/sales which surpassed the ultimate valuation peak of the S&P 500 during the market top in 2000 (see …
Today the S&P 500 closed down 45 points or -1.56% after a rather wild day with many interspersed attempts at getting back to unchanged. The last two weeks have been incredibly pivotal in markets since a bout of bad manufacturing data caused the market to sell off last week (where bad data is actually interpreted …
The reason we chose to look at this sector of the economy is threefold: 1). It was the catalyst1 for the previous recession and financial crisis 2). The sector is not nominally impacted by the China trade war 3). It tends to show aging/topping before other sectors because of interest rate sensitivity We would like …
We hope everyone had a nice holiday and is looking forward to the new year. The market recently bounced off lows with all major indices posting at least 4.5% gains the day after Christmas, a substantial of which was realized towards the end of the trading session. The following day, every index appeared ready to …
This past week we have seen some positive price action take the market by force, driving the S&P 500 back above break-even for the year (Figure 1). The broader equity market posted a strong rally on Wednesday following two words (yes… two words) spoken by Jerome Powell, head of the Federal Reserve, “just below”. This …
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