FINANCIAL ICEBERG
Always consider hidden risks



Jean-Pierre Desloges CFA  is a professional  investment consultant/ blogger/ trader with over 25 years of experience working on the buy and sell-side.

​​I have researched and invested in traditional and alternative asset classes and worked at Pensions Funds, International Banks and Dealers.   
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Market Insight​

December 5

SP500: At Major Crossroads?
​​​What we must realize is that the market is full Risk On as the High Beta stocks (SPHB ETF) on a relative basis with SP500 Index (SPY ETF) reached the Major Daily Resistance Trendline that started back in July 2014!

Canadian Technical Charts Potpourri
The XIU ETF is surprinsingly underperforming the SPY ETF (+2.3% vs +2.6%) since November 8 2016 with overweight in Financials (40.41% of XIU), Energy (21.57%) and Base Metals (10.20%).

Sell-side share analysis is wrong
​Profits forecasts made more than a few months ahead have a dismal record of inaccuracy...

Here's How Much Trump Tax Cuts Could Boost The Stock Market
​Corporate tax reform under Trump could give S&P 500 earnings a huge lift, analysts say.

December Macro Update: Employment Growth Is Decelerating
​The macro data from the past month continues to mostly point to positive growth. On balance, the evidence suggests the imminent onset of a recession is unlikely.

Trump’s Tough Trade Talk Could Damage American Factories
​But many existing American manufacturing jobs depend heavily on access to a broad array of goods drawn from a global supply chain — fabrics, chemicals, electronics and other parts. Many of them come from China...


​​​​​December 1

Monthly Technical Charts Potpourri
The Trumpification of Financial Markets in November as pro-growth and reflation theme within a protectionism bias repriced violently stocks vs bonds, US Dollar Index vs Gold...

S&P 500 Index: Rare Bollinger Band Width Worth Monitoring
If 2016 and 2017 fall into the bullish camp, the major U.S. stock market indexes will remain above their recent long-term consolidation boxes, asset class behavior will continue to align with risk-on outcomes, and the current bullish trends will remain in place. If the bears start to work on the previous list, the odds of “bad things happening” will improve. Time will tell.

Is industrial metals surge a sign of growth in economy, markets?
Industrial metals are attempting to break their relative downtrend versus precious metals; that has historically been good news for the economy and stocks.

Rising Dollar = Dollar Shortage = Global Liquidity Shortage
And while US markets continue to be blissfully unconcerned, you can be sure that there is no such sanguinity and complacency right now in Asia.

Should we celebrate rising rates?
​While rate changes can cause short term profits and losses, they also change the coupon yield that constant maturity portfolios reinvest at, which can largely offset short-term losses over multi-year periods. So for investors with a medium-to-long-term outlook, the initial rate that they invest at likely has more impact on their long-term returns than the rate changes they experience while they are invested.

November 29

FANG Stocks Overview
The Trumpification of Financial Markets bring all of the FANG stocks to underperform the SP500 Index since the US Election.

Three Tailwinds Will Buoy Global Stocks in 2017: SocGen
​Watch out for inflation, elections, and rotation.

Is advance decline line divergence a big deal ?
​Non-confirmations by the NYSE Advance-Decline Line of new market highs have often signaled major trouble for stocks – will it be the case this time?

What Happened To The Earnings Recession
​In summary, the EPS growth for the S&P was 11.5% yoy in 3Q16, the highest quarterly growth in two years. Overall profit margins are back at their former highs from 2014. Nearly all of the interim weakness in profitability was related to weakness in energy. That the other sectors showed continued strength was a very strong indication that corporate results were not indicative of an imminent recession (from Yardeni).

20 Canadian stocks set to win from Trump’s ‘good policies’, according to RBC
​“Canadian companies stand to benefit from President-elect Trump’s policies in two ways: 1) The direct impacts from lower corporate taxes and fewer regulations and 2) The impact of stronger U.S. growth and the flow through to Canada both through better domestic growth and some of the knock-on impacts,” said RBC analyst Matthew Barasch in a research note.

November 28

​Financial Markets Already Trumped
A lot of good news (Trumpification of Financial Markets) already priced in as Divergence on Price vs Volume intensifies.

Canadian Technical Charts Potpourri
The XIU ETF is surprinsingly underperforming the SPY ETF (+2.8% vs +3.6%) since November 8 2016 with overweight in Financials (40.41% of XIU), Energy (21.57%) and Base Metals (10.20%).

​​​Value stocks ending 10 year drought vs growth
For the past decade, value stocks have been trending lower on a relative basis versus growth stocks; that appears to be changing.

Overseas cash hoards repatriated under Trump would lead to huge share buybacks: Goldman
A huge source of net demand for stocks throughout this bull market, buybacks are of significant importance when analysts are making their estimates for future stock valuations.

Dollar Strength Warrants Caution On U.S. Equities
The strong U.S. dollar is tightening global liquidity conditions, putting the post-election jump in stock prices at risk unless growth accelerates imminently.

MSM's Druck'n Suck-In Continues
A breakdown of nearly a century's worth of data shows that the market finishes out election years better under an elected Republican than Democrat.

​​​​​​​November 23

The VIX/Gold Correlation US Dollar and SP500: Higher Volatility Ahead?
So both the US Dollar Index (DXY) and the SP500 are within a technical set up that call for a higher Volatility environment as history suggest according to the VIX/GOLD correlation.

Typically strong December slightly weaker in election years
Rarely does the market fall precipitously in December. When it does it is usually a turning point in the market—near a top or bottom. If the market has experienced fantastic gains leading up to December, stocks can pullback. Conversely if the market has been through the ringer of late and December is down as well, then expect a rally to ensue shortly.

Did The 'Trump Tantrum' Just Trigger The Next Us Recession
Expect it to get ugly in 2017 after the election honeymoon wears off!

Swedroe: The Perils Of Bargain Hunting
Summarizing the findings from these three recent papers, investor preferences and beliefs lead to the pricing anomaly in which low-priced stocks—especially those with higher betas, high idiosyncratic volatility and high skewness—show poor raw returns and very poor risk-adjusted returns.

Rising rates (really) reaching resistance
The spike in the 10-Year Yield has brought it into a cluster of significant potential resistance stemming back nearly a decade.

​​​​​​November 22

SP500: Full Risk On Behavior?
That tells me how convinced (or complacent?) market participants are about the market potential​​​ in terms of risk reward on a short term basis.

Does likely 2nd fed rate hike mean return to normal
Whatever the case, political shake ups are happening around the world and Chair Yellen’s days are numbered with the new Trump administration unlikely to re-appoint her for another term in 2018. Despite what the Fed says about low inflation, we think real inflation that hits us all in the pocketbook and bank account is much higher, economic growth is gaining traction, and the stock market remains rather buoyant.

Do Larger Budget Deficits Stimulate Spending? Depends on Where the Funding Comes From
In sum, there may be rational reasons why the U.S. equity markets rallied in the wake of Donald Trump’s presidential election victory. But an expectation of faster U.S. economic growth due to a more “stimulative” fiscal policy is not one of them unless the larger budget deficits are financed with thin-air credit. Fed Chairwoman Yellen, whether you know it or not, you are in the driver’s (hot?) seat.











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