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Companies with the Lowest Dividend Yields Are Driving Performance

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In the month of January, the most important factor correlation to performance of developed market stocks has been dividend yield (DY). Interestingly, though, the best performance has been generated in those stocks that belong to the lowest decile (those that pay a smaller dividend relative to their share price) while those with the highest DY have […]

French Economic Uncertainty at All-Time Highs

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The rise in European government bond yields has been widespread since lows in early fall last year, led by Italy and (now) France. As investors turn to the relative safety of bunds, the spread between French and German yields (light blue line below) has risen to multi-year highs. In addition, the economic policy uncertainty index […]

Positive Revisions to Estimates Surge

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The percentage of positive revisions to developed market sales and earnings estimates jumped over the last month, with an average of 76% of companies reporting better sales estimates and 70% reporting better earnings estimates. Developed Markets (DM) DM Americas has remained the most steady of the three regions as ~50% of companies have reported positive revisions […]

Is the European Investor About to Become More Omnivorous?

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With yields in Europe well below 2% for the better part of the last five years, foreign bonds–especially US Treasuries, trading at an increasingly higher spread to German counterparts–offered an appealing alternative. Appetite for USTs is one that remained strong for 50 straight months as yields in Germany fell nearly continuously. In November, however, European […]

Euro Area Debt at Four-Year Low

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Consolidated debt in the Euro Area fell to the lowest level in four years, according to 3Q2016 figures released today. The overall average for the monetary union fell to 90.1% of GDP in the third quarter, with continued wide dispersion among its members. Greece remains closer to 180% of GDP– nearly three times the ECB’s […]

Brent-WTI Spread Widest in Months, More to Come?

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Weekly field production of crude oil in the US averaged a steady ~15%yoy growth from the beginning of 2012 until mid-2015. That rate dropped into negative territory as production declined an average of ~2%yoy in the last year and a half. Advances in drilling technology over the last several years, detailed in geopolitical strategist Peter […]

Short Interest on NYSE Fell by 20% in 2016

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As of the end of December, short interest–the number of shares investors have sold short on the NYSE–dropped to its lowest level since early 2014, even as stock market indices hovered at new highs. Similar declines in the level of short interest occurred in 2009, 2010, and 2012. We looked at similarly relaxed behavior as it […]

VIX Flirting with Pre-GFC Lows, Uncertainty at All-Time Highs. Huh?

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Recently, we have highlighted a number of divergent trends between ‘soft’ data and ‘hard’ data in both Europe and the US. For the most part, improving survey responses remain unconfirmed by the quantifiable information currently available. The surge in the economic policy uncertainty index is no exception. In 2016, uncertainty rose around the world, led […]