In an Insight late last week, we mentioned our rule of thumb that stocks cannot stomach more than 100-125bps tightening via a selloff in the 10-year US Treasury bond within a year. Applying this rule to the present-day suggests that…
The Fed has telegraphed that they will not be backing down from QE and their ZIRP policy. The FOMC is not even thinking about thinking about tapering asset purchases despite a looming inflation spike in the coming months due to…
Highlights A rise in global bond yields has rarely been a reliable precursor of a stronger dollar. This is because the dollar reacts to interest-rate differentials, rather than the level of global yields. Changes in the dollar…
Overweight In an Insight in mid-October we referred to the 10-year US Treasury yield as a sleeping giant and reiterated that this asset class was the last one that had yet to respond to the Fed’s QE as we had first…
Highlights Health care remains a top priority of the Democratic Party even though it is flying under the radar at the moment. Health care embodies the shift from small government to big government. While the 2021 budget reconciliation…
Last year we created two baskets of stocks to capture the economic reopening theme by constructing a long/short pair trade. This year, we crystallized 21.5% in gains from that pair trade and subsequently reopened it. Today, we take a new…
In the last week’s Strategy Report we highlighted how the often-heavy-lifting tech sector’s profit growth contribution to calendar 2021 SPX earnings is giving way to other GICS1 industries. Historically, the tech…
On the January 12 Insight we recommended investors put on a synthetic long SPY position using March 19th, 2021 long SPY $390/$410 call spread financed by a $340 put for a total debit of $0.8/contract, with a max payout of $20…
Today we close two high-conviction trades and place a stop buy order for the June 2021 expiry VIX futures as a hedge to the remaining positions. Homebuilders have proven to be more resilient than we expected, especially…
Overweight We remain on the sidelines with regard to the broad S&P technology sector, but we continue to recommend a barbell portfolio approach preferring defensive software and services stocks to aggressive hardware and…