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Results 301–350
of 441 found.
Revisions Have Improved But Can It Last?
by Team of GaveKal Capital,
The percent of stocks in the MSCI World Index that have had positive EPS revisions compared to six months ago currently stands at 45%. Over the past 7+ years, the average level of this statistic is 56%. So it currently stands below average levels but encouragingly it has improved from a low of 30% set on January 14th.
The Right Tool For The Job of Active Management
by Team of GaveKal Capital,
Market-cap weighted indexes such as the MSCI global equity indexes are commonly used reference points for investment benchmarking. In these indexes, the market cap of the top 10% of the stocks is generally 50% of the market cap of the index.
Where Banks Are Performing Well In The World
by Team of GaveKal Capital,
There is an old belief that when bank stocks are doing well, the economy must be doing well also. With this in mind, we decided to take a look how the banking sectors have performed in seven different countries: USA, Germany, United Kingdom, France, Japan, China, Brazil.
Is Volatility Making a Comeback in Europe?
by Team of GaveKal Capital,
Having fallen from the recent highs earlier this year, various metrics of volatility in Europe have risen abruptly in the last few days-- especially when viewed in the context of a rather subdued VIX (a measure of expected market volatility conveyed by S&P 500 options prices; represented by the light blue line below).
Something To Keep In Mind During Earnings Season...
by Team of GaveKal Capital,
As we enter the heart of the S&P 500 1Q earnings season, and the CNBCs of the world focus on the number of companies that (surprise) beat earnings expectations once again, remember this fact: earnings expectations have been beaten down over the past six months. Let's take a quick tour of the developed world to illustrate this point.
Is Brazil The Next BRIC To Ride EM Equity Wave?
by Team of GaveKal Capital,
On an equal-weighted, USD basis, Russia is up 46% year-to-date, by far the best performing country in the MSCI All-Country World Index. Coming in second, is China which is up 29%. India is the 14th best performing country (8.2%). The lone man out is Brazil which is the fifth WORST performing country year-to-date, one of only 10 countries posting a negative return year-to-date (-7%).
Are Commodities And EM Stocks Becoming Less Sensitive To The Dollar?
by Team of GaveKal Capital,
Are commodities becoming less sensitive to changes in the USD? The surge in the dollar has negatively affected commodities somewhat but not nearly as much as one might have expected given that the real trade-weighted dollar is 19% higher than it was in July. Commodities are about 19% lower during this time. However, when the dollar surged by 14% in 2008, commodities fell by 39%.
Can The Marriage of Two Knowledge Followers Produce a Knowledge Leader?
by Team of GaveKal Capital,
Most of our readers are familiar with our process that seeks to identify what we refer to as Knowledge Leaders or, quite simply, companies that consistently invest in knowledge-intensive activities such as research & development, advertising, and employee training. Common attributes of knowledge leaders include, but are not limited to, less volatile earnings and sales growth, lower adjusted ROE, and a larger stock of intangible capital on their balance sheets.
How Much Lower Can The 30-Year Treasury Yield Go?
by Team of GaveKal Capital,
Three weeks ago we mentioned how Fed assets were finally declining on a quarterly basis. Since then we have had a few more data points released and the trend is still downward. Compared to three months ago, the Fed's balance sheet has shrunk by over $32 billion. We are, however, beginning to reach the contractionary limit during the QE period. The most the Fed's balance sheet has contracted over a three month period was $81.8 billion in May 2012.
Where Positive Economic Surprises Are (And Aren't) Happening
by Team of GaveKal Capital,
There is a geographic disparity amongst the Citi Economic Surprise Index. Economies, both developed and emerging, are surprising to the upside in Asia and Europe while economies in the western hemisphere are not doing as well (at least in terms of meeting and exceeding expectations). Below we show some of the more interesting charts.
Bottom Fishing
by Team of GaveKal Capital,
I often go back and re-read things that have shaped my perspective on managing portfolios. In my 20s (in the 1990s) I was fortunate to have a friend and mentor named Clay Allen who taught me volumes on the art of portfolio management. He introduced me to the point and figure method of charting stock prices and we often talked at length about how to win the "losers game".
Well, you know this is a bull market [in government bonds]!
by Team of GaveKal Capital,
Those familiar with "Reminiscences of a Stock Operator" will recall several scenes in which young traders are gathered at a brokerage house exchanging ideas and contemplating every tick on the tape as if marked some monumental episode for owners of the stock. Then one of the young traders would ask a quiet veteran trader, who was sitting in the corner paying little or no attention the topic de jure, what he thought of the recent price action of some issue, to which the veteran would reply, “Well, you know this is a bull market”.
Growth Expectations Are No Longer Cratering For Energy Stocks
by Team of GaveKal Capital,
Sales and earning growth expectations for energy stocks are still pretty awful for the next fiscal year (FY1). Sales are expected to drop by 17% and earnings by a whopping -29%. However, earnings are expected to make a V-shaped rebound. Analysts expect sales to grow by an average of 12.3% per year over the next three years (FY2-FY4). The rebound in earnings is expected to be even stronger. Earnings are expected to grow by an average of 32.5% per year over the following three years (FY2-FY4). These expectations are setting a high bar for the energy sector for 2016-2018.
Latin America Is Blowing Up Your EM ETF Performance
by Team of GaveKal Capital,
On an equal-weighted, USD basis, the MSCI Emerging Markets Index is up just 0.99% YTD compared to MSCI World Index which is up 5.65%. So is this just a simple continuation of the trend of emerging market underperformance that has been in place over the last 4 years ? Yes, but with a caveat.
Keep it Simple: India is Outperforming Because Oil is Crashing and Inflation is Tame
by Team of GaveKal Capital,
India has for years battled high levels of inflation which has in many ways kept the country from realizing its full economic potential. Over the last year though, basically since the price of oil stopped going up, Indian inflation has remained tame. As global growth has continued to muddle through, the further collapse of the price of oil has been a major tailwind for India since global growth has not collapsed in lockstep.
Charting The Winners And Losers Of The Latest Surge In The USD
by Team of GaveKal Capital,
On March 4th we wrote in The Dollar Is Breaking Out Again And What It Means For Stocks that "for a variety of cyclical and structural reasons...stocks in North America tend to be the relative beneficiary of USD strength while stocks in other regions generally, but not always, tend to underperform. The negative correlation is especially strong for European stocks." Well, since then the USD has surged another 6% so we thought we'd review how things have played out.
Pop Quiz: What Is The Best Performing Regional Sector YTD?
by Team of GaveKal Capital,
The recent focus of the financial world (including for us) has been on the massive currency moves going on in the forex markets. By this point, everyone and their grandma knows that the US dollar has been on an explosive move higher. Since we are in a stronger US dollar environment now that must mean the US stock market has been outperforming in US dollar terms, correct? Not so fast.
The Market Is Pricing In Two Rate Hikes In 2015 (And Four In 2016)
by Team of GaveKal Capital,
According to Fed Fund futures, the market currently expects about 2 rate hikes by December 2015 (assuming the Fed raises rates by 25 basis points each time). Fed Funds futures is pricing the Fed Funds Rate at 54 basis points by December 2015. The market was most optimistic regarding delaying fed hikes in mid-January when the market was pricing in only about one and half hikes for 2015.
ECB Asset Purchases = (Big) Equity Decline?
by Team of GaveKal Capital,
We have commented quite a bit on the dismal revisions to sales and earnings estimates (see here, here, and here for just a few examples). As we have noted, European stocks have excelled in the downgrade department, led by the Energy sector.
The Dollar Is Breaking Out Again And What That Means For Stocks
by Team of GaveKal Capital,
The ICE US dollar index looks to have broken out of what has been a rather short-lived consolidation after the massive move since the middle of 2014. If this is in fact the start of another round of dollar strength, then stock investors should carefully consider where in the world to deploy cash into stocks. For a variety of cyclical and structural reasons, certain regions of the world tend to outperform in periods of USD strength and others lag. We'll try to shed some light on that with the below charts.
Rise in Spanish CDS Outpaces Greece
by Team of GaveKal Capital,
Unsurprisingly, the cost of insurance against Greek default (as evidenced by 10-year credit default swaps) has risen since the beginning of the year. It is interesting to note, however, that the monthly rate at which Spanish CDS are rising is actually higher, increasing more than 20% according to the most recent data point.
Putting Declining Sales Estimates In Context
by Team of GaveKal Capital,
We track analyst estimates in a variety of ways. We look at growth rate expectations over the next four years. We also measure the percent change in the level of USD estimates across various time frames. We also track the difference in growth rates now versus three months ago. Finally, we look at the percent of companies that are experiencing a positive earnings revision over various time frames.
Is That Leveraged ETF Worth It? Comparing SSO and VOO
by Team of GaveKal Capital,
As ETFs control a larger number of assets under management, it is no surprise that the options available to investors are getting ever more exotic. One of the early examples (and thus we actually have history available) of exotic ETFs are leveraged ETFs. Leveraged ETFs attempt to to mimic the daily change in an index, in today's case the S&P 500, by a defined multiple (i.e. 2x, 3x, etc). Today, we will look at one of the more highly used leveraged ETF: Proshares Ultra S&P 500 (ticker: SSO).
47% of the MSCI World Index Is In A Correction (At Least)
by Team of GaveKal Capital,
Regular readers know we like to slice the market internal data in a many different ways because a lot of the time the cap-weighted indices aren't a proper representation of what is going on with the majority of stocks. With this in mind, one of the ways we like to measure what is going on underneath the surface is to take a percentage of stocks that are trading at levels less than 10% off its 200-day high, 10-20% off its 200-day high, 20-30% off its 200-day high and greater than 30% off its 200-day high.
Positive Economic Surprises in Europe, Negative in the U.S.
by Team of GaveKal Capital,
The Citi Economic Surprise index is a quick way to get a high-level look at the condition of economic data around the world. Calculated as a diffusion index, values generally range between 100 and -100 for the overall index, which is currently right in the middle of that range.
Over Half The Stocks In The MSCI World Index Are Outperforming The Index For The First Time In A Yea
by Team of GaveKal Capital,
For the first time in exactly one year, over half the stocks (51%) in the MSCI World Index are outperforming the headline MSCI World Index over the past 252 trading days (1-year). This is the highest percentage of stocks outperforming in exactly one year.
Is There A Case For German Equities?
by Team of GaveKal Capital,
With the highest productivity in Europe, a sizeable current account surplus and rock bottom interest rates, is there a case to made for German equities? Germany's competitiveness, export performance and trade surplus should increase as the Euro weakens helping German exporters in markets outside of the Euro bloc.
Health Care Stocks Pick Up in 2015 Where They Left Off in 2014
by Team of GaveKal Capital,
Across two of the three regions in the MSCI World Index, the health care sector has been the best performer over the last year. In North America, measured in USD, health care stocks are up 29.13% over the last year, while they were up 5.96% in Europe and 2.53% in Asia/Pacific.
Intellectual Property Helps Boost 3Q GDP Growth To Highest Level Since 2003
by Team of GaveKal Capital,
As was widely reported yesterday, 3Q GDP growth was the strongest since 9/30/2003. However, less widely reported was the fact the intellectual property products contributed the most to real GDP in 32 quarters (9/30/2006).
4 Sectors That May Be Worth Avoiding
by Team of GaveKal Capital,
Success in investing can many times come down to avoiding the major losers rather than always hitting home runs with one's winners. Correct sector allocation plays an important role in sidestepping potential landmines that out there in the market.
Europe Flash PMI Better, Not Fabulous
by Team of GaveKal Capital,
While today's better than expected rise in the flash PMI indicator (black line) for the euro zone is a welcome surprise, it would seem that it will take quite a bit more improvement before we can reasonably expect substantial progress in the recovery of important metrics such as GDP or industrial production.
Why Does Everyone Keep Asking Us About Great Value Buys in Europe?
by Team of GaveKal Capital,
While attending a conference last week and hearing questions and comments such as, "Europe's pretty cheap right now, isn't it?", "Where are you finding the best deals in Europe?", and "I bet you are finding a lot of value in Europe these days", we felt as though it might be appropriate/ necessary to quickly review where European valuations stand at the moment (short answer: the perception that an abundance of relatively inexpensive stocks may be found in Europe is largely misguided).
A Point-and-Figure Perspective on Ratings Upgrades
by Team of GaveKal Capital,
Faithful followers will already know that we do not rely on meetings with management or analyst reports in our methodology for finding the world's best knowledge leaders. And, while we have developed a more objective, data-driven process, it is always interesting to at least take a look at how our various tools compare with the consensus from the street.
Black Friday Special: How Do The Retailers Look?
by Team of GaveKal Capital,
In honor of Black Friday, we thought we would look at how the North American retailers look from a technical perspective using our relative point and figure charts. Once again, our box size is 2.5% relative performance and all charts have four years worth of history.
Where's Waldo Global Treasury Bond Style
by Team of GaveKal Capital,
In case some of our readers aren't familiar with the popular picture book/game series entitled Where's Waldo, here's a quick run down of how it works. Basically, the object is to find an inconspicuously dressed Waldo among a throng of people in endless settings ranging from a sports stadium to the Egyptian pyramids and everything in between. Finding Waldo isn't as easy as it sounds as he tends to blend in quite well with his surroundings.
If German Yields Break To New Lows, European Cyclicals Will Likely Follow
by Team of GaveKal Capital,
European cyclicals continue to be the weakest segment of developed global equity markets, and there doesn't appear to be much sign of that changing. We refer to the extremely strong relationship between German 10 year bond yields and the relative performance of European cyclical sectors.
Next 12 Month Sales Estimates For MSCI North America Lowest Since 2009
by Team of GaveKal Capital,
Last week we looked at how sales growth estimates for the next fiscal year are now negative for five of the 10 MSCI World Index sectors. Today, we are again looking at estimates but this time from a forward 12-month perspective. Sales for the MSCI World Index are only expected to grow by 3% over the next 12 months according to estimates (blue line below). This is about 2% lower than expected in July. EPS for the MSCI World Index are expected to grow by 9% over the next 12 months which is about 1.5% lower than expected in July.
Realized Volatility is Picking Up, but Remains Far From Extremes
by Team of GaveKal Capital,
After an extended period of extremely muted volatility in virtually every major asset class, volatility is finally starting to pick up, as it was always likely to do. A number of our volatility measures such as our equity, FX, bond and commodity volatility have turned a corner recently and have moved up off of in some cases generational lows.
The US Mortgage Application Market Finally Wakes Up
by Team of GaveKal Capital,
All summer long we talked about how mortgage applications were down and couldn't get off the mat. That looks to finally be changing, at least from a refinancing point of view over the past couple of weeks. In the last two weeks the mortgage application index has increased from the 350 to 413 and has broke out of the range it has been in all year.
October has Been a Tough Month for Stock Picking
by Team of GaveKal Capital,
The percent of stocks with positive performance for the month of October through last Friday stands at a paltry 15%. Granted, as of last Friday there were ten trading days left in the month, but 15% would the lowest reading since May of 2012 and September of 2011 before that.
Stock Valuations Remain Near Record High Including in Europe and EM
by Team of GaveKal Capital,
Even as stock prices have corrected in recent weeks with only 36% of stocks having positive performance over the last 200 days and the average stock 19% from its one year high, we are reminded that stock valuations are still stretched pretty much everywhere.
Putting the Pieces Together: An In Depth Chart Review of Global Financial Markets
by Team of GaveKal Capital,
One of our favorite grounding exercises is to peruse our chart library and review what has happened in the global financial markets so we can opine about what those prices and patterns are telling us about the world. We'll save the opining for another time, so we present the following charts with little commentary.
The Largest Stocks Are Carrying The MSCI World Index
by Team of GaveKal Capital,
The 50 largest stocks in the MSCI World Index account for roughly 28% of the total market cap of the MSCI World Index. So for a market-cap weighted index such as the MSCI World, the movement of the largest 50 stocks (out of 1615 total stocks) can have an outsized effect on the performance of the index as a whole at certain times.
Results 301–350
of 441 found.
