In a nutshell US Budget Deficit is someone else surplus. Was it too much? Well, the FED is trying to manage the situation. Higher inflation, higher interest rates and DSR (Debt Service ratio) across the board. Beneath the surface of higher nominal economic growth, evidences are mounting that things are not so rosy. Inflation...
The massive COVID stimuli and the Ukraine war have brought inflation that most of us have never experienced. The price of money, interest rates, have gone up aggressively since last year. I did underestimate the inflation shoot up as the FED but there are a few things we need...
Back in July 2021 and May 2021, I wrote : "I believe that COVID 19 has unleashed the full power of the BTFD mind set. It is so powerful that it could become an unprecedent FOMO (Fear of Missing Out) wave. A race which could push indices with relative...
I have focused most of my stock market comments on the US stock market. Why? Since the GFC of 2008 which originated in the USA; money managers and investors had to do one choice. Allocate 100% of their equity exposure to the US stock market, in particular to the Nasdaq...
Market structure is an important driver of the price action. We all agree that excess liquidity is an important item but we need to understand better its impacts. I deeply believe that we are in a derivative bubble where cash price action has mainly become a derivative of the...
I have highlighted in previous posts that the diversification rule has been a drag to any investor, in particular to Non-US Investors. Since the GFC 2009 March low, the Nasdaq (QQQ etf) is the best performer of the world. (Red line is Nasdaq 100 vs total world with a...
Following-up on my December 6th, 2020 post , there was a link about a great work done by Christopher Cole from Artemis Capital (The Allegory of hte Hawk and the Serpent). Here is a great interview he made last year with Danielle DiMartino https://youtu.be/SkfgEZtJ9LA
The above chart is the ratio of the ETFs ITOT & VT and the green line is the USD currency index. ITOT tracks a market cap-weighted index of all common equities listed on the NYSE and the NASDAQ. VT tracks a market-cap-weighted index of global stocks covering 98% of the...
The two charts are a just an illustration over time of how I best view the principal driving forces behind the markets. What matters here, are the proportions and their respective empirical evolution. It varies countries from countries but since we all use the same monetary/economic system, the trip is...
In "Something seems to have changed" , I highlight the "commodity like behaviour" the S&P 500 index seems to have "adopted". Among the many charts I follow, here is one which shows the relationship between the SKEW index and the Equity PUT/CALL ratio. The SKEW index is a measure of potential risk...
