Archive | December, 2015

Where Are Valuations At Heading Into 2016? EM Edition

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Yesterday we looked at where developed world valuations stand so today we are going to move over to the emerging markets. The equity pain experienced in the EM in 2015 has been well documented. While the median stock in the developed world has managed to squeak out a slight gain, the median stock in the emerging […]

Where Are Valuations At Heading Into 2016?

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The average price to cash flow value for a company in the developed world currently sits at 13.67x while the median value is lower at 10.18x. Europe has some of the most expensive and cheapest valuations out there based on price to cash flow. Denmark and Ireland are the only countries to have an average P/CF […]

Market Implied Inflation Expectations Approaching 2015 Lows


The market isn’t foreseeing an inflationary burst going into the new year. TIPS implied breakeven inflation is near 2015 lows across 5-year, 10-year, and 30-year time frames. 5-year breakeven inflation currently sits at 124 basis points, 10-year breakeven inflation is at 150 basis points and 30-year breakeven inflation is at just 170 basis points. Breakeven […]

Focus On Less Leveraged Companies When Markets Get Squirley

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2015 is looking like one of those years in the stock market where it feels like investors have wasted a lot of time and effort for nothing. We have undoubtedly had a lot of ups and downs, both literally with stock prices and emotionally for investors, and all we have gotten in return is a market that is basically flat (intraday […]

US Stock Market Breadth Has Deteriorated Throughout 2015

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Over the past year, more stocks in the US have been declining than advancing for the first time since 2009. In the charts below, we show the cumulative net advances (i.e. # of stocks advancing minus the number of stocks declining each day cumulatively added together over a specific time frame) over 1-year, 2-year, and 3-year time periods. […]

China Keeping the Dream Alive with Government Spending

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Reported central government spending in China, which is likely only a fraction of the actual level of state directed spending in the economy, has recently shot up to a new all-time high just as the reported economic growth rate has plunged to a low not seen since the late ’90s. A coincidence this is not. Growth […]

Smart Money is Extremely Long 5-Year Treasuries

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With the Federal Reserve presumably about to raise the Fed Funds Rate for the first time since 2006 this week, we thought it would be a good time to look at the latest commitment of traders report (12/11) to see how commercial (i.e. smart) and non-commercial (i.e. speculative) traders are currently positioned in the bond […]

Breaking Down US Energy Valuations

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It’s not breaking news to say its been a bad year for energy stocks but it might be breaking news that not all energy stocks are trading at cheap valuations. In the United States, the median energy stock is down nearly 29% (the average energy stock is down about 23%). As this first chart shows, […]

Oh Canada…One Of The Pain Trades Of 2015


Canadian equities are washed out but unfortunately the rout doesn’t look like its completely over. The GKCI Canada Index is made up of 120 companies, 59 of which are either energy (25), materials (19) or industrial (15) companies.  The largest sector, by number of companies, is actual the financial sector (26). The median Canadian energy company […]