Perhaps THE biggest event so far this week was the breakout in 10-Yr UST yields today north of 2%. As shown below, the 10-Yr UST broke the bearish trend that has been in place since 2011.
Barry Bannister, Managing Director of Equity Research at Stifel Nicolaus, joins Financial Sense Newshour to discuss whether to “Sell in May and go away” as well as the stark parallels between now and the 1930's.
The elusive bottom in Chinese stocks is becoming more constructive here with a higher low being put in, above the 200-day moving average. MACD signaled a buy in May and is moving into positive trend territory on the daily chart.
Investors have increased their appetite for risk as the market continues to climb to new highs. There was a tremendous amount of fear in April that growth was not going to be sufficient to maintain such lofty levels on the major averages. Economic data was beginning to surprise to the downside and many felt that a long awaited pullback was just around the corner.
In his usual colorful style, CNBC commentator Rick Santelli joins Jim on the Financial Sense Newshour to clear up the confusion on a number of hot-button issues. First, he explains why austerity—without applying all the necessary ingredients, like reform—hasn't worked in Europe or elsewhere.
The April jobs report on May 3rd sparked a renewal of something I’m calling the "Taper Trade." As I mentioned last week, the effect of renewed faith in U.S. cyclical stocks post-Q2 earnings, along with a rise in the ECRI’s leading economic indicator, better housing data, and this jobs data has been a shift in investor sentiment back towards growth, and away from defensive tactical weightings in Treasuries, the dollar, healthcare, and utilities.
In this special interview with Oxford’s Oliver Inderwildi airing Thursday, Jim and his guest discuss the numerous dynamics of oil and economic growth—what Jim defines as the Petro Business Cycle—and how this relates to riots in Syria, whether non-conventional sources of oil can solve our energy needs, and a number of other factors.
Leading indicators for the labor market suggest we get an acceleration in payroll gains heading into the fall, which is what the market may be discounting currently as it continues to hit new all-time highs. With the market’s long-term momentum continuing to improve and the outlook for employment encouraging, the risks of a recession and/or bear market appear remote with the market likely heading to new all-time highs into the fall.
The past few years we have seen the market roar higher out of the gate only to suffer a sharp pullback as we enter the spring. A spike in the price of oil has been a major cause of that each time. As the price of fuel has spiked in each of the past few years we have all in effect suffered a tax hike.
The market is perhaps in the best shape it has been in over a year when looking at its trend and momentum. Perhaps the biggest development in recent weeks is the clear rotation away from defensive sectors and into cyclical sectors. This development is likely to propel the market even higher given 70% of the S&P 500 is made up of cyclical sectors. There is no erosion in either the market’s trend or momentum, and until we see erosion in the markets breadth and momentum the path of least resistance is clearly higher.
