In the month of January, the most important factor correlation to performance of developed market stocks has been dividend yield (DY).
A Bloomberg article (February 2nd) highlighted a recent survey of 400 executives whose overwhelming concern is talent scarcity.
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.
Consolidated debt in the Euro Area fell to the lowest level in fours years, according to 3Q2016 figures released today.
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”.
Today’s CPI release by U.K.’s statistical service prompted more than a few versions of the following chart, insinuating that the precipitous drop in the GBP is going to drive prices sharply higher.
Certainly, no one is implying that the U.K.’s economic situation is anywhere near as precarious as that of Greece. We just wanted to point out a peculiar oddity of which we were not previously aware, whatever the investment implications may be.
