Negative real yields = Equity sell signal?

In Free by Cam Hui

A reader asked me my opinion about this tweet by Nautilus Research. According to this study, equities have performed poorly once the inflation-adjusted 10-year Treasury yield turns negative. With real yields barely positive today, Nautilus went on to ask rhetorically if the Fed is behind the inflation fighting curve.     Since the publication of that study, The January YoY …

Weaken the USD to Make America Great Again

In Free by Cam Hui

About a month ago (see The bear case: How Trumponomics keeps me awake at night), I highlighted a Bloomberg interview with BAML currency strategist David Woo. Woo pointed that there is an inherent contradiction in a couple of Trump’s policies. His fiscal policy of tax cuts is pro-growth and therefore USD bullish, but his “America first” trade policy needs a …

The bear case: How Trumponomics keeps me awake at night

In Free by Cam Hui

Preface: Explaining our market timing models We maintain several market timing models, each with differing time horizons. The “Ultimate Market Timing Model” is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade. The Trend Model is an asset allocation model which …

Don’t ask me about gold, ask about the USD

In Free by Cam Hui

Mid-week market update: The market gods must be angry. Just as a goldbug predicted the demise of the US Dollar (and therefore the rise of gold) as of September 30, 2016 at 4pm ET, the USD rallied and gold cratered on Tuesday. The technical damage to gold was extensive, as it broke a key support level at 1300, though it …

Three key macro factors to watch in today`s market

In Free by Cam Hui

I have spent a lot of time in these pages writing about the influence of macro-economic factors on market analysis. Indeed, Matt King at Citigroup recently highlighted the growing importance of macro factors on the equity market (chart via Bloomberg):   Here are three key macro factors that I have been watching now for clues to the direction of the …

Watching the USD for stock market direction

In Free by Cam Hui

Explaining our market timing models We maintain several market timing models, each with differing time horizons. The “Ultimate Market Timing Model” is a long-term market timing model based on research outlined in our post Building the ultimate market timing model. This model tends to generate only a handful of signals each decade. The Trend Model is an asset allocation model …

The bulls are winning, but they shouldn’t relax

In Free by Cam Hui

Mid-week market update: On the weekend, I wrote that the stock market was experiencing a bullish breadth thrust and the market is likely to see a series of “good”overbought readings where stock prices either continue to grind up or consolidate sideways as they get overbought (see RIP Correction. Reflationary resurrection next?). So far, so good. The market seems to be …

Worried about a China devaluation and currency war?

In Free by Cam Hui

I had been meaning to write about this earlier, but I didn`t find the time. Kyle Bass caused a stir last week with his letter to his investors when he wrote that China was on the verge of a major devaluation and financial blow-up (via Valuewalk): Our research suggests that China does not have the financial arsenal to continue on …