Friday Outlook: Commodities, Global Markets 13 comments
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Those $1 Happy Meals are just what the doctor ordered for contemporary America, right? Sorry, I just couldn’t resist the image and metaphor.
I did promise in the financial comment a link to Philip Greenspun’s blog (must be a contrived name…if not, my apologies). Herein he describes just how our big banks make money with your money. It’s called fixed-income leverage. And did you happen to see that twice failed (LTCM) John Meriwether was launching a new hedge fund to trade bonds with leverage? You’ll no doubt be ringing him up.
We sheeple have no idea what yesterday’s big sell-off was all about but evidently no one else knows either so the dip buyers entered. It’s definitely a strange environment with valuations sky high as they were back in 1999-2000. But with cash yields this low and plenty of liquidity sloshing about combined with peer performance pressure, it’s a combustible situation.
Again, in after hours trading AMZN and others are doing quite well.
click to enlarge
Often, perhaps like you, just before sleeping I ponder what tomorrow will bring in the markets. All I have is the current news and seem to have a pretty good idea as to how things will open the next day. But then I’ll know the news cycle will continue while sleeping and perhaps things will be dramatically changed. They often are.
Let’s see what happens and you can follow our pithy comments on twitter.
Disclaimer: Among other issues the ETF Digest maintains positions in: SPY, RSP, VTI, MDY, IWM, UDN, GLD, DBC, USL, XLE, EFA, EWC and EEM.
The charts and comments are only the author’s view of market activity and aren’t recommendations to buy or sell any security. Market sectors and related ETFs are selected based on his opinion as to their importance in providing the viewer a comprehensive summary of market conditions for the featured period. Chart annotations aren’t predictive of any future market action rather they only demonstrate the author’s opinion as to a range of possibilities going forward. More detailed information, including actionable alerts, are available to subscribers at www.etfdigest.com.
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Could you also considering adding ILF (iShares S&P Latin America 40)? Although it does track closely to EWZ, I would appreciate your thoughts. Peace!
Charles
there is one chart missing..... $SPX:$XEU
if not sure, try : $SPX:$XJY
or : $SPX:$HUI
not sure if bucky is sexy enough..??? cross your fingers..!!
and many thanks for your great job..!!
Regards
I suppose doing this is becoming somewhat boring since searching the globe for uncorrelated sectors is becoming impossible. This is due primarily to low yields driving more risk taking making for a global trend.
We could get away with posting three charts probably and achieve the same thing as we do with 30 or 40 believe it or not. It's just the way things are presently. Eventually this will change.
Love your comments and insights. I have been into ILF since last Dec, but added EWZ early this year as it was performing better. Brazil is a great place to invest, and you can choose ILF, EWZ or the new kid on the block BRF.
And Dave, you're right. Many markets are tracking the same. Though my two cents would be to add either JNK or HYG to your bond charts as they are the high-yield variety which could be interesting in relation to the security conscious Treasuries.
Thanks
it's all about, for western countries, to support the $ (the USA) or not....!! there are not many ways to do it.... -0.25 or -0.5% on rates on €..?? Never Jean Claude will do it..!! To buy the tresuries the Fed won't buy anymore..??? western financial suicide..??!!
what a mess..!!
If there is none, it would be interesting to know why, as most etfs have an inverse, or so it seems.
On Oct 23 11:02 AM David Fry wrote:
> One of the frustrations currently is how many market sectors are
> in the same trend separated only by beta or degree.
>
> I suppose doing this is becoming somewhat boring since searching
> the globe for uncorrelated sectors is becoming impossible. This is
> due primarily to low yields driving more risk taking making for a
> global trend.
>
> We could get away with posting three charts probably and achieve
> the same thing as we do with 30 or 40 believe it or not. It's just
> the way things are presently. Eventually this will change.