CoronaVirus Not the Entire Reason Stocks are Correcting
Stocks are correcting. The 10%-type correction we penciled in at the beginning of the year is now taking shape. Now for most readers, the move lower will bring a wry smile….
Stocks are correcting. The 10%-type correction we penciled in at the beginning of the year is now taking shape. Now for most readers, the move lower will bring a wry smile….
After 20+ years trading – its difficult to recall a time that resembles what we see today. Put another way – it’s not often you see equities and bonds at complete odds.
The ratio of copper to gold can serve as another indicator of the market’s appetite for risk appetite versus the perceived safety of say treasuries. So what’s the ratio telling us today?
This post summarises what I’m watching as we head into a big week of earnings…
Looking at 5 leading high-dividend ETFs for investors to consider as part of their portfolio allocation.
Here’s what I think is ahead for 2020 and equity markets. In short, expect a solid year with a correction in the first half.
A technical review for the S&P 500, Gold and US 10-Year Treasury Yields in the weekly timeframe.
In summary, the S&P 500 looks overbought where traders should consider taking profits.
Gold is approaching a key buy-zone.
And expect resistance with 10-year treasuries around 2.1%
Over the past 3 months – the heavily traded (owned) TLT ETF has seen strong outflows.
The price has dropped from a high of ~$148 to trade around $135 at the time of writing — the fund posted its worst week of outflows – with traders yanking more than $1.2 billion, according to data compiled by Bloomberg.
The bond market’s performance is generally viewed as an indicator of economic conditions.
More accurately – bonds reflect investor expectations of economic conditions up to 12 months out.
The reason for this is market participants anticipate the future in making investment decisions, so at any point market prices reflect, or “discount” the consensus expectation of what’s to come.
The explosion in credit is unprecedented.
For most developed economies – larger amounts of credit are now needed to produce higher rates of economic output.
Quick math suggests our new ‘growth’ equation is now ~$4 in fresh new credit for $1 of output.