201608.27
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Sector Snapshot: Technology Leading

I haven’t posted on sector momentum since just after the Brexit vote because there hasn’t been much change. The most obvious change is that all sectors are now positive on a three month basis. Defensive sectors have retreated a bit and more cyclical sectors have advance a bit. The result is a market that is…

201608.16
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Global Asset Allocation Update

The risk budget is unchanged this month although the composition of the portfolio does change. For the moderate risk investor, the allocation between bonds, risk assets and cash remains at 50/45/5. There are changes to the allocation but the overall risk budget stays the same. Credit spreads did continue to narrow this month but other…

201607.12
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The Hope Trade Returns Though Severely Stunted As It Should Be

All it takes are the words “record high” and all economic or financial sins are forgiven and forgotten. The financial media cannot contain themselves whenever they get the chance to use the term, adding qualifications like “soar” and “sharply” to make sure everyone gets the message. Context need not apply because stocks are supposed to…

201606.27
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Sector Snapshot: Defensive Sectors Take The Lead

Even before the Brexit vote, momentum was shifting to defensive sectors. The rally in weak dollar sectors – other than the gold/silver mining industry – was looking very overbought and tired anyway, so Brexit was a good excuse to take some profits. Whether the dollar can retain the strength it has gained on this historic…

201606.13
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Global Asset Allocation Update

The risk budgets are unchanged again this month. For the moderate risk investor, the allocation between risk assets and bonds remains at 40/60. I struggled more with this decision than any in recent memory but in the end there just isn’t sufficient evidence to make a change. Raising or lowering the allocation to risk assets…

201606.10
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Bi-Weekly Economic Review

Economic Reports Scorecard Concern about recession is growing again as formerly strong portions of the economy turn down. The last two weeks brought reports of new weakness in the labor market, continued slowing in construction and renewed weakness in manufacturing. Auto sales were also weak based on the reports from individual manufacturers. The state of…

201606.05
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What Now, Ms. Yellen?

Well, that was ugly. The lousy employment report released this past Friday threw the markets and probably the FOMC for a loop. Stocks didn’t really do anything – yet – but other markets more than made up for that minor oversight. The dollar was down 1.5% on the week, all of that after 8:30 Friday…

201606.03
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Chart Of The Week: Stocks More Expensive Than 2000

This week’s chart comes to us from Ned Davis Research via this article on MarketWatch: What that bottom pane shows is that the median price to sales ratio for the S&P 500 is about 2.2. That is higher than in 2000, which was about as obvious a bubble as one is likely to ever see….