The declining risk in stocks supports a continued recovery. Watch for declining risk in energy commodities for renewed strength among those assets.

Market volatility is an indicator of financial stress. Low or declining volatility environments may indicate favorable periods for equity investments, whereas rising volatility periods may favor sovereign debt and developed market currency exposure.

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Correlations remain low in all asset classes except for bonds. We believe taking active positions is still a great way to diversify your portfolio.

The correlation figure measures how each asset return moves in relationship to the broader basket of asset returns listed on the X axis. When correlations are high or rising, it may indicate that economic movements and sentiment are driving the majority of returns, which could potentially make security selection challenging.

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Short-term momentum has weakened for non-US stocks, likely driven by Italy’s political problems. We believe this is likely just a short-term bump in a wider recovery.

Momentum measures the rate of acceleration, either positive or negative, in a security’s price and may indicate which markets are positioned for gains or losses. Investing based momentum entails establishing long positions in securities with positive recent returns and short positions in those with negative recent returns. Momentum in asset classes may illustrate the development of trends in the market.

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The 10-year Treasury finished the week at 2.93%, declining off of last week’s highs. From a technical standpoint, this is the second failed drawdown for bonds and will likely kick off a countertrend rally.  We believe this will likely be supported by problems in the European stock markets.
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Market volatility is beginning to decline for stocks which is suggestive of a renewed rally. Commodities still remain high but that is typical for the asset class and should be considered when sizing an allocation.
Market volatility is an indicator of financial stress. Low or declining volatility environments may indicate favorable periods for equity investments, whereas rising volatility periods may favor sovereign debt and developed market currency exposure.

The healthiest momentum has been in foreign developed stocks and energy commodities. We believe this is also a segment of the capital markets with no correlation to other parts of the market, providing good potential returns and diversification.
The correlation figure measures how each asset return moves in relationship to the broader basket of asset returns listed on the X axis. When correlations are high or rising, it may indicate that economic movements and sentiment are driving the majority of returns, which could potentially make security selection challenging.

Momentum for stocks and energy commodities are still showing positive signs. We believe small cap stocks have been pushing higher, which tends to be a good sign for overall market health.
Momentum measures the rate of acceleration, either positive or negative, in a security’s price and may indicate which markets are positioned for gains or losses. Investing based momentum entails establishing long positions in securities with positive recent returns and short positions in those with negative recent returns. Momentum in asset classes may illustrate the development of trends in the market.

The 10-year Treasury ended a wild week at 3.11%. After several months of strong returns, EM sovereign bonds have been under selling pressure. However, we believe EM corporate bonds and high-yield corporate bonds are still looking like good sources of income.
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Volatility among stocks is declining, supporting a better case for stocks. However, volatility for EM bonds is rising which could indicate mounting issues with this asset class.

Market volatility is an indicator of financial stress. Low or declining volatility environments may indicate favorable periods for equity investments, whereas rising volatility periods may favor sovereign debt and developed market currency exposure.

See the data

Correlations among U.S. and emerging market stocks continue to rise, but energy commodities and foreign developed stocks buck that trend. Note the increasing correlations for sovereign debt, which we believe is eating away at the diversification benefits of bonds.

The correlation figure measures how each asset return moves in relationship to the broader basket of asset returns listed on the X axis. When correlations are high or rising, it may indicate that economic movements and sentiment are driving the majority of returns, which could potentially make security selection challenging.

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Momentum is improving for all stock asset classes and energy commodities. We believe this all points to increasing inflationary pressures. It’s hard to argue against inflation especially with strong job numbers.

Momentum measures the rate of acceleration, either positive or negative, in a security’s price and may indicate which markets are positioned for gains or losses. Investing based momentum entails establishing long positions in securities with positive recent returns and short positions in those with negative recent returns. Momentum in asset classes may illustrate the development of trends in the market.

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Overall market risk remains elevated, but is declining among foreign developed stocks. We believe this is consistent with improving momentum.

Market volatility is an indicator of financial stress. Low or declining volatility environments may indicate favorable periods for equity investments, whereas rising volatility periods may favor sovereign debt and developed market currency exposure.

See the data

Correlations remain low in foreign developed stocks and energy commodities. We believe investors may look for active bets in this part of the market, given improving momentum and volatility.

The correlation figure measures how each asset return moves in relationship to the broader basket of asset returns listed on the X axis. When correlations are high or rising, it may indicate that economic movements and sentiment are driving the majority of returns, which could potentially make security selection challenging.

See the data

Short-term momentum continues for foreign developed stocks and energy commodities. We believe bonds will continue their slide lower, setting up a pretty clear reflationary trend.

Momentum measures the rate of acceleration, either positive or negative, in a security’s price and may indicate which markets are positioned for gains or losses. Investing based momentum entails establishing long positions in securities with positive recent returns and short positions in those with negative recent returns. Momentum in asset classes may illustrate the development of trends in the market.

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Volatility is beginning to decline for equities, most notable for foreign developed markets. We believe this could be a signal that the sell-off that began earlier this year is winding down.

Market volatility is an indicator of financial stress. Low or declining volatility environments may indicate favorable periods for equity investments, whereas rising volatility periods may favor sovereign debt and developed market currency exposure.

See the data

Correlations among equities is rising, likely signaling a reboot of the reflation theme that drove the market through much of 2017. Note that correlations for commodities still remain low and may provide investors with some good diversification as well as a positive trend.

The correlation figure measures how each asset return moves in relationship to the broader basket of asset returns listed on the X axis. When correlations are high or rising, it may indicate that economic movements and sentiment are driving the majority of returns, which could potentially make security selection challenging.

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Commodities are now the best performing asset class of 2018, driven mostly by energy and metals. This follows years of lackluster and even deeply negative returns for all commodities. We believe the current level of short- and long-term momentum for energy and metals signals that the positive trend should continue.

Momentum measures the rate of acceleration, either positive or negative, in a security’s price and may indicate which markets are positioned for gains or losses. Investing based momentum entails establishing long positions in securities with positive recent returns and short positions in those with negative recent returns. Momentum in asset classes may illustrate the development of trends in the market.

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Market risk remains high for nearly every asset class with very little changes over the past few weeks. A sustained downturn in volatility would help signal a new rally, especially for stocks and commodities.

Market volatility is an indicator of financial stress. Low or declining volatility environments may indicate favorable periods for equity investments, whereas rising volatility periods may favor sovereign debt and developed market currency exposure.

See the data

Correlations remain low among all asset classes. With the improvement in commodities, both in terms of momentum and volatility, investors might want to consider an allocation to diversify away from stocks and bonds.

The correlation figure measures how each asset return moves in relationship to the broader basket of asset returns listed on the X axis. When correlations are high or rising, it may indicate that economic movements and sentiment are driving the majority of returns, which could potentially make security selection challenging.

See the data

Very little has changed over the past week except for some strength among commodities, particularly energy and metals. The current shift in short-term momentum is bullish for commodities.

Momentum measures the rate of acceleration, either positive or negative, in a security’s price and may indicate which markets are positioned for gains or losses. Investing based momentum entails establishing long positions in securities with positive recent returns and short positions in those with negative recent returns. Momentum in asset classes may illustrate the development of trends in the market.

See the data

Stock volatility still remains high, although it has dipped a bit in Europe and Japan. We believe this is consistent with momentum and signals that the current run up in stock prices is not an all clear signal.

Market volatility is an indicator of financial stress. Low or declining volatility environments may indicate favorable periods for equity investments, whereas rising volatility periods may favor sovereign debt and developed market currency exposure.

See the data

Correlation for all asset classes remain very low. We believe this potentially bodes well for active investors and indicates that investors should think about making any significant off benchmark bets in the current market environment.

The correlation figure measures how each asset return moves in relationship to the broader basket of asset returns listed on the X axis. When correlations are high or rising, it may indicate that economic movements and sentiment are driving the majority of returns, which could potentially make security selection challenging.

See the data

Short-term momentum is still pretty weak for stocks. We believe this helps put the recent run up in stock prices into perspective and makes a good argument that the sideways churn isn’t over.

Momentum measures the rate of acceleration, either positive or negative, in a security’s price and may indicate which markets are positioned for gains or losses. Investing based momentum entails establishing long positions in securities with positive recent returns and short positions in those with negative recent returns. Momentum in asset classes may illustrate the development of trends in the market.

See the data

As international stock momentum improves, volatility has been declining. This might be the beginning of a new push higher for stocks.

Market volatility is an indicator of financial stress. Low or declining volatility environments may indicate favorable periods for equity investments, whereas rising volatility periods may favor sovereign debt and developed market currency exposure.

See the data

Correlations remain very low across all asset classes. We believe investors could potentially be rewarded by making active bets in this environment.

The correlation figure measures how each asset return moves in relationship to the broader basket of asset returns listed on the X axis. When correlations are high or rising, it may indicate that economic movements and sentiment are driving the majority of returns, which could potentially make security selection challenging.

See the data

Short-term momentum has improved for international stocks but has deteriorated for domestic stocks. Which we believe could be a direct result of the recently enacted tariffs.

Momentum measures the rate of acceleration, either positive or negative, in a security’s price and may indicate which markets are positioned for gains or losses. Investing based momentum entails establishing long positions in securities with positive recent returns and short positions in those with negative recent returns. Momentum in asset classes may illustrate the development of trends in the market.

See the data