Category

Small Cap ETFs

Buy The Dip In Long-Term Treasury Bonds To Hedge Stocks?

By | Bond ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Large Cap ETFs, Mid Cap ETFs, Short ETFs, Small Cap ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

The 10-year Treasury yield pays 15 basis points LESS than the 3-month Treasury yield. That’s rather nutty when you think about it. Even nuttier? 30-year sovereign yields across the globe are LOWER than the Federal Funds Rate (FFR) of 2.38%. Why are bond market investors demanding the safety of lower-yielding, longer-term, sovereign debt? Why do many crave it more than higher-yielding, shorter-term instruments? Investors anticipate that the Federal Reserve will need to slash its overnight lending rate in attempts to stimulate…

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The Silencing of the Bears

By | Bond ETFs, Current Affairs and ETFs, Dividend ETFs, Emerging Market ETFs, ETF Philosophy, ETF Strategy, Global ETFs, Large Cap ETFs, Small Cap ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

Since 2015, I have been less than enthusiastic about risk assets. And while I do not short the market, nor have I ever been completely divested from equities, investors have been rewarded for “going long.” Nevertheless, a review of the previous four years must note the 22 months of sideways stock movement that preceded the November 2016 election. The assessment must also account for the calendar year losses in 2018, especially for smaller-cap equities and foreign equities. The reason that…

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So Goes Apple, So Goes The U.S. Market

By | Asia ETFs, Bond ETFs, China ETFs, Commodity ETFs, Consumer ETFs, Current Affairs and ETFs, Emerging Market ETFs, Energy ETFs, ETF Philosophy, ETF Strategy, Europe ETFs, Global ETFs, International ETFs, Large Cap ETFs, Semiconductor ETFs, Small Cap ETFs, Special Sectors ETFs, Technology ETFs, US Markets and ETFs | No Comments

Apple (AAPL) has been one of my largest individual holdings for the bulk of the post-recession stock bull. I believed in it when it was trading for one-tenth of its current value back in 2009. I even believed in it when it plummeted 40% in the winter of 2012-2013. Back then, though, Apple’s troubles did not adversely affect the broader equity rally. On the contrary. The S&P 500 exhibited all of the signs of a powerful uptrend. More recently, Apple…

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Conspicuous Weakness In Market Internals A Bad Omen For Stocks?

By | Asia ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Europe ETFs, Financial ETFs, Global ETFs, International ETFs, Large Cap ETFs, Popular Posts, Real Estate ETFs, Small Cap ETFs, Special Sectors ETFs, Technology ETFs, US Markets and ETFs | No Comments

One week ago, FactSet revealed that 250 of the stocks in the S&P 500 had dropped more than 20% from all-time peaks. The index itself, however, had only declined a modest 5% from its record top. Today, there are more indications of market distress. The Russell 2000, a popular small cap barometer, has dropped 13% from its high. The Dow Jones Transportation Average has fallen 13% as well. And the Financial Select Sector SPDR (XLF) is sitting at a 52-week…

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Higher Rates Will Hurt Stocks More Thank You Think (Part 2)

By | Bond ETFs, Currency ETFs, Current Affairs and ETFs, Emerging Market ETFs, ETF Philosophy, ETF Strategy, Europe ETFs, International ETFs, Large Cap ETFs, Small Cap ETFs, Special Sectors ETFs, Technology ETFs, US Markets and ETFs | No Comments

In my previous week’s commentary, I explained why higher interest rates will hurt stock assets more than many might think. Naysayers pointed to the fact that rate levels are still quite low on a historical basis. Unfortunately, these folks are neglecting to place their comprehension of borrowing costs in context. Take a look at the last 20 years of U.S. monetary policy via the Federal Funds Rate (FFR). The Federal Reserve’s tightening phase from the 4% level up to the…

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Corporations Set Records For Buybacks As Their Insiders Sell

By | Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Large Cap ETFs, Mid Cap ETFs, Popular Posts, Small Cap ETFs, Special Sectors ETFs, Technology ETFs, Telecom ETFs, US Markets and ETFs | No Comments

Tax-cut infused earnings have been solid. The rapid-fire rise of longer-term borrowing costs has slowed considerably. And corporate share buybacks have dwarfed earlier records. In Q2 alone, corporations purchased a staggering $436.6 billion in stock buybacks. That brings the year-to-date total to $670 billion. Similarly, announced S&P 500 buybacks are practically leaping off of the chart. More than most factors influencing market direction, buybacks have kept large-cap stocks from succumbing to legitimate concerns about Federal Reserve policy error, China trade…

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The Yield Curve and Stocks: Much Ado About Everything

By | Current Affairs and ETFs, Dividend ETFs, ETF Philosophy, Large Cap ETFs, Popular Posts, Small Cap ETFs, Special Sectors ETFs, Technology ETFs, US Markets and ETFs | No Comments

There has been a great deal of chatter about the strength of the American job market. And with good reason. Most measures of employment health – U-2 unemployment rate, jobless claims, wage increases, year-over-year job growth, etc. – support the notion that U.S. workers are “winning.” On the other hand, very few folks have addressed the possibility that the data are more likely to weaken than strengthen. On the contrary. So much faith is being placed on tax cut stimulus…

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Non-Diversification: Free Stock Risk Without The Reward

By | Bond ETFs, Current Affairs and ETFs, Emerging Market ETFs, ETF Philosophy, Europe ETFs, Financial ETFs, International ETFs, Large Cap ETFs, Popular Posts, Small Cap ETFs, Technology ETFs, US Markets and ETFs | No Comments

Let me be quick to acknowledge that yield curve inversion can have considerable lag time before a recession. And for that matter, the U.S. Treasury bond curve can invert long before a stock market bear. For instance, 10-year yields fell below two-year yields in February of 2006. That was approximately 22 months before the recession officially hit in December of 2007. What’s more, between 2/2006-10/2007, the S&P 500 managed to climb more than 20%. There’s more. The 1990s Treasury bond…

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Shock the “Short S&P 500 Volatility” Monkey

By | Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Large Cap ETFs, Small Cap ETFs, Special Sectors ETFs, Technology ETFs, US Markets and ETFs | No Comments

A top-tier financial web site interviews me at the start of every year. The interviewer typically asks me about specific securities, asset allocation, economic backdrop as well as the impact of events (e.g., central bank monetary policy, mid-term elections, tax reform, etc.) This year, at the tail end of the interview, I fielded an atypical query. He wanted to know what “market surprise” might occur in 2018 (good or bad) that the financial media are not talking about. I thought…

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Warning: Side Effects May Include Rapid Stock Price Depreciation

By | Bond ETFs, Current Affairs and ETFs, ETF Philosophy, ETF Strategy, Large Cap ETFs, Leveraged ETFs, Popular Posts, Small Cap ETFs, Special Sectors ETFs, US Markets and ETFs | No Comments

Over the last decade, the most influential central banks around the world have printed electronic currency credits to acquire $14 trillion in assets. The effect on stocks, bonds and real estate? Remarkable price gains as well as records galore. On the other hand, quantitative easing (QE) activity by the U.S. Federal Reserve, People’s Bank of China, European Central Bank and others has created a variety of implausible circumstances. The Swiss National Bank has become one of the largest shareholders in…

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