Thursday , January 21 2021
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Tag Archives: Uncategorized

The Small-Cap Equity Factor Is Humming Again. Will It Last?

Small-cap stocks have taken a back seat to large caps in recent years, but the relative drought is over. Or at least it’s faded in recent months, based on a set of exchange traded funds that represent a variety of US equity risk factors. The shift in leadership is certainly conspicuous in the new year. Notably, three flavors of small-cap stocks (value, core and growth) are leading the field by a wide margin, based on 2021 returns through last week’s close (Jan. 15). A few...

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Macro Briefing: 19 January 2021

* Biden plans to unveil sweeping immigration bill on first day as president* Yellen to promote “big” coronavirus relief package to Senate Fin. Comm. today* Biden administration prepares to focus on full-employment policies* German investor sentiment rises more than expected in January* Extreme weather and infectious diseases are cited by WEO as top 2021 risks* Pandemic has intensified rivalry between US and China, WEO report says* 10-year Treasury yield begins trading this week at...

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US Property Shares Led Returns For Major Asset Classes Last Week

US real estate investment trusts (REITs) remain range-bound but property shares managed to lead the major asset classes last week by a wide margin, based on a set of exchange traded funds at Friday’s close (Jan. 15). Vanguard US Real Estate (VNQ) popped 1.9% last week, the fund’s strongest weekly gain since mid-November. A solid performance but the gain doesn’t break the ETF out of its trading range that’s prevailed for the past two-and-a-half months, as shown below in the...

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Macro Briefing: 18 January 2021

* Biden plans rollbacks of Trump era policy decisions on Wednesday* China reports 6.5% GDP growth for Q4 & and 2.3% for 2020* Russian opposition leader Navalny’s arrest heightens Russia-West tensions* Incoming Treasury Sec. Yellen expected to affirm market-based exchange rates* Weak value investing results weigh on quant strategies* US industrial output up a strong 1.6% in December* NY Fed Mfg Index shows softer growth in January* US retail sales fell for a third month in...

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Weighing the Week Ahead: What Will Biden Proposals Mean for Investors?

We have a light, holiday-shortened week ahead. There are several reports on housing, but everyone will be focused on the Inauguration and hopes for a peaceful transition of power. Anyone with skin in the game will be asking: What does a Biden Administration mean for my investments? In my last installment of WTWA, I suggested the need for substantial earnings growth to justify stock valuations. I also introduced Springtime Blossom Indicators – what we really need to monitor in our search for...

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Book Bits: 16 January 2021

● The New Great Depression: Winners and Losers in a Post-Pandemic WorldJames RickardsQuote by author via Global Finance“I did not live through the Great Depression, but my parents did and they were affected for life,” says James Rickards, author of The New Great Depression: Winners and Losers in a Post Pandemic World. “This will be very similar.” A 2020 study published by the Federal Reserve of San Francisco looked at 650 years of pandemics and found that monetary policy, economic...

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The Best MLK Weekend Of All-Time

We are reposting this for the holiday and in honor of Dr. King, one of our greatest Americans, a patriot, and a true saint. I exchanged emails with Reverend Senator-elect Raphael Warnock after posting it. Originally Posted on January 21, 2019 During my Lehman days as a bond strategist, the firm’s research group would do a January roadshow in many of America’s major cities to present our ideas to institutional investors.   One particular year, we were in Atlanta at the end of the week...

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The ETF Portfolio Strategist: 15 Jan 2021

In this issue: The small-cap equity rally continuesPortfolio-strategy benchmarks take a hitBroad-based market losses weigh on managed-risk strategiesSmall-cap stocks are pricing in a rosy 2021: There are still plenty of risks lurking, including uncertainty over what the incoming Biden administration will be able to accomplish. The President-elect on Thursday outlined an ambitious $1.9 trillion pandemic relief program that, if enacted, would go a long way in juicing the economy....

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Comfortably Numb: Are We There Yet?

Almost there, baby?  Markets certainly are. OKJust a little pinprickThere’ll be no more aaaaaaaah!But you may feel a little sick – Pink Floyd Hard to say what the pinprick will be.  My bet is higher inflation and higher interest rates.    On the other hand, it could be a form of Structured Criticality.  Just one more grain of sand will be all it takes to trigger the avalanche. Structured criticality is a property of complex systems in...

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Research Review | 15 January 2021| Forecasting

Long-Term Stock ForecastingMagnus Pedersen (Hvass Laboratories)December 17, 2020When plotting the relation between valuation ratios and long-term returns on individual stocks or entire stock-indices, we often see a particular pattern in the plot, where higher valuation ratios are strongly correlated with lower long-term stock-returns, and vice versa. Moreover the plots often show a particular curvature for this relation between valuation ratio and long-term stock-returns. The...

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