Pounded; BREXIT Risks Hit Markets

brexit

In a low volatility, range bound market, it doesn’t take much to cause a break. Rising global bonds yields are a major concern that double-impact the market; higher future business costs of funding growth, financing acquisitions, and implementing share repurchases, while, in tandem, high equity valuations are pressured. Now the market has another major worry. […]

Big in Japan; Can the Fed trump the BOJ?

alphaville

VIX back to the 15 range ahead of a consequential Fed meeting, deep into the economic cycle. Volatility crush continues into actual central bank announcements. Zombie US markets can’t go down but can’t rally either. After recent, underwhelming ECB announcements, markets sense more to come from the Fed, yet a gasping sense reigns omnipresent. What, actually, can […]

Volatility Suppression Challenged

rough-seas

Since the BREXIT rebound/rip, it’s been an exceptionally stable summer. Few predicted that the unexpected BREXIT vote, would be an unequivocal positive to markets. The tell, quite clear after the fact, was the global rate plunge, and the US 10-year yield sinking to the 1.35% range, around the 4th of July. The perfect combination arose […]

On Brexit

england euro cup

What a tumultuous 5 days. The lurching feeling is all the more acute after a period of one-way markets (up) and declining volatility. With polls shifting towards “Remain” last week, the prospect of all-time highs in the S&P 500 held an aura of inevitability. The unexpected Brexit vote, by a solid 4 point margin, tanked […]

Valuing the Yellen Put

janet yellen dove

The Yellen Put, follows a line of Federal Reserve inspired put options, valuable to market participants of specific Fed Chair eras. The rationale behind the Fed Chair put is simple; with the Federal Reserve so vigilant to support any downtick in the economy and/or markets with interest rate cuts (Greenspan), quantitative easing (Bernanke), and ZIRF […]

ISM sinks to post-2009 lows; Industrial Economy Recession a Catch 22 for Fed

industrial

November ISM sank to the lowest level since 2009. Stunning, that the ISM (Institute for Supply Chain Management) survey, formerly known as NAPM (National Association of Purchasing Managers), printed 48.6, the lowest level since the throes of the financial crisis. For perspective, the last time the ISM printed sub-48, in June 2009, the S&P was 900. Today, […]

Qui n’avance pas, recule

french flag

We all eat at restaurants, go to stadiums, and walk down the street. The tragically successful terrorist attacks in Paris highlight the vulnerability of the human condition at any instant. While this has always been the case, and will continue to be so, civilization, and human progress, over past centuries and decades, reduces the chance […]

Midsummer Issues Persist; Divergent Global Central Bank Actions Create Challenges

crossroads

The market moves fast. Thankfully, in the rest of the world, trends of all kinds, generally move at a measured pace. The market overreacts to events and day-to-day happenings based on crowd think and behavioral issues. A change in trend will often start with a subtle data point or indicator, which in hindsight, ignites a […]