Top News Headlines
Kinder Morgan (N:KMI), Freeport-McMoran (N:FCX), Anglo American (L:AAL) cut dividends
Climate deal reached in Paris. Not legally enforceable, all voluntary, no one cares.
Dow Chemical (N:DOW), Dupont (N:DD) agree to merge, divest and keep Wall Street employed.
Junk bond fund halts redemptions.
Economic News
China loosens Yuan peg to the dollar.
Crude Oil hits new lows.
Jobless claims hit 5 month high.
Retail sales disappoint again; auto sales down second straight month.
Fed expected to hike rates this week.
Random Thought Of The Week
In recent weeks I’ve heard that we are in an “earnings recession” and a “manufacturing recession”. The oil patch is in recession and mining companies are, I guess, in a dividend recession since they all seem to be cutting them, in some cases all the way to zero. And yet no one has proclaimed yet that the overall economy is in recession. One wonders how many “recessions” we have to have before the qualifiers are removed.
Chart Of The Week
If it walks like a duck and it quacks like a duck, well you might have a duck on your hands. Manufacturing is not the tiny piece of the economy the talking heads would have you believe and it isn’t doing well.
Broad Market – 3-month Returns
REITs and the S&P 500 are back at the top of the 3 month rankings but that’s just because stocks are back near their highs. A longer term look shows that stocks have made no progress over the last year. Long term Treasury ETFs have moved back into the top 5 as stocks have sold off over the last week.
MOMENTUM ASSET ALLOCATION MODEL SPDR Sector Returns – 3 Month Returns
Consumer staples moved back near the top as the market gets more defensive. Interesting that technology has gotten a lot of attention as a leading sector but REITS have actually performed better over the last 3 months. Technology outperformed REITS by a wide margin – until the late August selloff.
SPDR SECTOR ROTATION MODEL Country Returns Top 10 – 3 Month Returns
Japan back in the lead and Asia generally leading. One wonders if China’s economy is stabilizing.
Commodity Returns Top 10 – 3 Month Returns
Sugar bulls better enjoy it while they can. There’s a developing glut and India is about to dump a large inventory on the market. Gold cracked the top 10 for the first time in a while although still down.
Bond Returns Top 10 – 3 Month Returns
Duration and high quality is winning in bonds right now.
Stock Valuation Update
Have valuations finally peaked? In case you’re interested that’s about a 35% drop down to the median. You don’t want to know how far it is down to that other line.
