Commentary

Fisher & Paykel Healthcare: A Pandemic Study in Embracing Change

How does a Knowledge Leader handle a global pandemic? By adapting.

Commentary

Owning Gold is as Much about Diversification as it is about Capital Appreciation

Regular readers of our content know that we have been building the case for several years now on why gold deserves a place in diversified portfolios.

Commentary

Ready for Another USD Rally?

As funding strains appeared in March, the USD surged. Then the Fed stepped in with massive foreign exchange swaps as a way to lend USD to foreign central banks, intended to ultimately be lent to borrowers in need of USD.

Commentary

The Path to Average Equity Returns in the 2020s is Challenged

The returns of the 2009-2020 bull market were nothing short of extraordinary. From the 2009 low in the S&P 500 to the 2020 high, stocks gained a massive 488%, or nearly 18% on an annualized basis.

Commentary

There is Nothing Normal About the US Savings Rate

Even as the stock market chugs up the wall of worry, we were reminded today that the economic fundamentals remain mired in simply unprecedented territory.

Commentary

Keep an Eye on the Yuan & Corporate Spreads

Since the March 23, 2020 low, when the Federal Reserve announced basically unlimited liquidity via a variety of programs, corporate spreads have narrowed, and the stock market has risen substantially. In the chart below, I overlay US investment grade spreads over the S&P 500 Index.

Commentary

Here’s 5 Reasons Why Gold Miners Have Massive Outperformance in the Tank

As I write this note on a dreary Friday afternoon from Boulder, CO I am reminded of my town’s origin. Its first non-native settlers established the town 1858 as a base camp for gold and silver miners.

Commentary

Here’s Where Friday’s Employment Report Could Really Disappoint

Given the surge in unemployment claims over the last month the US unemployment rate is expected to rise to 16% in April from just 4.4% in March. Shocking as that number is, we have no problem with that forecast.

Commentary

If the Bear Market is Over, Why Are Commodities and Transports Underperforming?

We are beginning to see some important divergences develop between the stock market and other data that suggest we are not out of the woods yet.

Commentary

Important Divergence Between Equities and High-Yield Credit

While not 100% correlated, there tends to be a pretty good relationship between movements in the S&P 500 and credit spreads, both investment grade (IG) and high-yield (HY).

Commentary

Here’s Why 2/3rds of US Oil & Gas Companies May not Exist a Year from Now

Energy companies are facing a life or death moment in 2020 with the price of WTI crude oil falling to $13.64/barrel as of this writing. Indeed the collapse in energy prices combined with poor fundamentals leading into the COVID crisis make most of the oil…

Commentary

Welcome to the Death Throes of 60:40 Diversification

Back in the good ole’ days of mid-January, asset allocators could look to long-duration US government bonds as a refuge for stormy weather. Those days are no longer.

Commentary

Why the Fed Cut Rates by 50bps: Will it Help?

Despite the relief rally yesterday, financial conditions have tightened significantly in the last couple of weeks. This likely explains why the Fed just made an emergency 50bps cut to the fed funds rate.

Commentary

Anatomy of a Panic Selloff

Anyone reading this post already knows that palpable panic has set into equity markets over recent days. We present these charts to highlight the extreme nature of the selloff so far, and as a reminder of the rarity of these events. In times like this, it’s important to remind oneself that these kind of extremes are transient and often present, at the very least, unique tactical opportunities.

Commentary

A Selloff, But Not An Actionable Low…Yet

Watching while the largest equity market in the world falls by a whopping 8% in four trading days brings us back to the 2008-2009 meltdown period of the financial crisis. Normally an 8% drop in such a short time frame would present an interesting intermediate-term buying or rebalancing opportunity outside of a recessionary environment.