Archive | April, 2016

Yen Breaks Below 107, Lowest Level Since 2014


The yen has fallen from 111 to under 106 in the past two days. This is the lowest level since October 2014. If the yen continues on this stronger trajectory, we will probably continue to see some underperformance from early and hyper cyclical stocks while it could act as a tailwind for cyclical stocks.  

Knowledge Leader Spotlight: IMAX Corp

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When one thinks of innovative companies, the movie and entertainment sub-industry isn’t the first group that comes to mind. However, as with most sub-industries in the global stock market, if you know what you are looking for you can find innovative companies in even an unlike sub-industry. Note: All data cited is intangible-adjusted IMAX corp (ticker: […]

Quarterly Strategy Update

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This quarter, we explore the hypothesis that the modern era of Ricardian growth has ended. We further explore what this means for asset allocation and which types of stocks in particular should do well in this Ricardian hangover. Download our First Quarter 2016 Strategy & Analysis here. In 1817 David Ricardo wrote Principles of Political […]

5 Charts From April’s Consumer Confidence Report

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Headline consumer confidence was a bit softer in April. The Consumer Confidence Index fell to 94.2 from 96.2 in March. This was below expectations of 95.8. The weakness in the report came from the expectations component as it fell by 4.3. The present situation component actually rose by 1.6. For just the second month since the […]

The Structural Shift In The US Commercial Paper Market


The 2008 financial crisis may have forever changed the US commercial paper market. Not only is the total amount of commercial paper outstanding still 50% less than its peak it 2007, the internal composition of the commercial paper market has changed dramatically as well. In 2007, only about 8-9% of the commercial paper market was made […]

Relative Volatility Springs Higher


If we take the differential between volatility in the Stoxx 600 (Europe) versus that of the S&P 500 (United States) as a proxy for relative levels of market fear, it might be useful to note that it broke to an all-time high on Monday–surpassing levels reached in 2011 and last year. Either variable on its […]

Visualizing The Sales Growth Slowdown Since 2008


One way that we like to visualize growth rates is by drawing trend growth trend lines. By this we mean we extrapolate various compound annual growth rates (2%, 4%, 6%, etc.) and plot it them against level statistics (in this case total sales). We index everything to 1oo at the beginning of the chart and by doing […]

Invest In Asia, Health Care To Reduce Your Correlation To Oil

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We have written about the historically high current correlation between oil prices and stock prices several times recently (see here and here). Correlation between oil prices and stock prices continues to increase as the 65-day correlation and 200-day correlation are once again making new highs going back to 1980. The 65-day correlation currently stands at […]