Report
EUR 22.10
For Business Accounts Only
http://track.com/articles/the-weekly-track-resilience-2/
The ability to make any money from markets begs the question about their efficiency. Clearly, all the information may be in the price overtime but just not at any moment. So, data dependency has become a part of the focus again as summer has turned past the midpoint and we are all in the downward slope for time away from screens and news. The rebound in the US dollar and US rates despite the headwinds of politics and doubts about the FOMC reminds us of how we need to bend to the changing mood like a young tree must grow despite the weather. There is little that changed from a fundamental point last week – it’s about the real rates and growth differentials again with money flows pivoting on economics and geopolitical concerns. Over the weekend, the Chinese seem upbeat on sanctions against North Korea to work. This follows yet another UN security council push against the rogue regime. Whether any of that matters aren’t so obvious but for the effect on US/China rel
ations. Trade and CPI data next week will be just as important as the US jobs and PMI reports last week and we must wonder if the bough can break on anything that looks weak just as the same tree managed to bend into the stronger data from jobs. So, the resilience of the markets is in play. The real issue is about dispersion not volatility. The calm of summer was disturbed last week but the bigger concern is about the wide spread of outcomes. The 2-week realized volatility of the S&P500 was below 4% while the individual shares averaged 22%. Dispersion in earnings season isn’t uncommon but not at such an extreme. This along with the bigger concerns about how the USD weakness will play out in the US economy makes the tree that may be must vulnerable to be the Russell 2000 – as small US companies don’t make money from abroad and if they import anything the weaker USD will only hurt. So, it goes into the week ahead – as we all want to bend and not break and pray
for better weather at least until Jackson Hole and the ECB Draghi Speech.
The Weekly Track resilience-2
- The Weekly Track – Resilience by Bob Savagehttp://track.com/articles/the-weekly-track-resilience-2/
The ability to make any money from markets begs the question about their efficiency. Clearly, all the information may be in the price overtime but just not at any moment. So, data dependency has become a part of the focus again as summer has turned past the midpoint and we are all in the downward slope for time away from screens and news. The rebound in the US dollar and US rates despite the headwinds of politics and doubts about the FOMC reminds us of how we need to bend to the changing mood like a young tree must grow despite the weather. There is little that changed from a fundamental point last week – it’s about the real rates and growth differentials again with money flows pivoting on economics and geopolitical concerns. Over the weekend, the Chinese seem upbeat on sanctions against North Korea to work. This follows yet another UN security council push against the rogue regime. Whether any of that matters aren’t so obvious but for the effect on US/China rel
ations. Trade and CPI data next week will be just as important as the US jobs and PMI reports last week and we must wonder if the bough can break on anything that looks weak just as the same tree managed to bend into the stronger data from jobs. So, the resilience of the markets is in play. The real issue is about dispersion not volatility. The calm of summer was disturbed last week but the bigger concern is about the wide spread of outcomes. The 2-week realized volatility of the S&P500 was below 4% while the individual shares averaged 22%. Dispersion in earnings season isn’t uncommon but not at such an extreme. This along with the bigger concerns about how the USD weakness will play out in the US economy makes the tree that may be must vulnerable to be the Russell 2000 – as small US companies don’t make money from abroad and if they import anything the weaker USD will only hurt. So, it goes into the week ahead – as we all want to bend and not break and pray
for better weather at least until Jackson Hole and the ECB Draghi Speech.
Provider
Track
TRACK.COM is an independent platform for investment research and market ideas. TRACK.COM research and analysis is used daily by hedge funds, proprietary trading desks, central banks and institutional asset managers to make investment decisions. These clients view Track.com as a trusted partner – our real-time research is thoughtful, well organized and right on target.
Robert Savage
Other Reports from Track
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.