The Weekly Snapshot

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Includes: DIA, QQQ, SPY
by: Joseph Calhoun

By Joseph Y. Calhoun

Economic News

  1. Fed hikes rates by 25 basis points, the bond market doesn't cooperate.
  2. Manufacturing data continues to disappoint.
  3. Service data starts to disappoint too. Uh-oh.
  4. Housing still strong.

Random Thought of the Week

Seven years of zero interest rates, and this is the best we can do? The Yellen Fed seems to believe that if they just believe that the economy is good, if they hike rates as if it was good, then it will be so. Which just goes to show how bare the cupboard of monetary policy really is. They've got nothing, and they know it.

Chart Of The Week

The percentage of stocks in the S&P 500 trading above their 200-day moving average sits today at a paltry 40%. What is really amazing about that number is that it is well above the low set in August in the teens. It is also way above the single-digit lows set in late 2008/early 2009. The trend is clearly down, and it isn't just the S&P 500 having trouble. The S&P 100 is at 41%, and the Nasdaq is at a gut-wrenching 32.5%. These are numbers normally associated with at least a stock market correction, and yet today we find ourselves just 6% below the all-time highs. That is a testament to how narrow the market has become, with only a few large stocks holding the averages up. I suspect that won't last much longer.

spx 200

Broad Market - 3-Month Returns

Stocks and REITs still lead the pack, but are fading fast in favor of high-quality bonds.

BROAD MARKET ETFS

(Momentum Asset Allocation Model)

SPDR Sector Returns - 3-Month Returns

Consumer staples and utilities are climbing.

spdr sectors

(SPDR Sector Rotation Model)

Country Returns Top 10 - 3-Month Returns

Asia continues to dominate the list.

COUNTRY RETURNS

Commodity Returns Top 10 - 3-Month Returns

Commodities are in a bear market, but there are always markets that are responding to their own supply/demand equation. Softs dominate, with ags also represented.

commodity returns

Bond Returns Top 10 - 3-Month Returns

High-quality duration.

bond returns

Stock Valuation Update

No matter how you slice it, stocks are expensive.

ABOOK Dec 2015 Valuations Alternate GDP Measures

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