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.
The latest Commitment of Traders report (as of last Friday) highlights some extreme levels of speculation in several different assets.
Over the last month, the average European bank has outperformed the broad developed market by about 7%, with more than half of them registering double-digit relative outperformance.
Since the U.S. election, small cap stocks (blue line) have advanced more than twice as much as large cap names (red line) and have more recently been consolidating gains after a very strong one month surge.
The British Pound is hovering near its one-month low of 1.23 versus the USD.
Fun fact of the day: the ECB’s decision to extend its asset purchase program to the end of 2017, albeit at a slightly slower pace than the current €80B per month, puts it on track to surpass the Fed’s current $4.4B level of assets sometime around next August.
The aggregate market cap of our entire developed world index, GKCI DM, has remained mostly in the range of $35-40T over the last few years, after surpassing the $35T level (previously reached in 2007) in late 2013.
The Sentix Euro Break Up Index is on the rise again, up to 24.08 in the latest monthly reading (as of 11/30/2016).
Preliminary data from Markit’s Purchasing Managers’ Index (PMI) survey, released today, convey an overall positive picture for the Eurozone as a whole.
Regular readers are aware of our research showing that the Knowledge Effect is really a “super factor”.