As a product of the last several years, ETFs’ promise of liquidity has yet to be tested in a major bear market, particularly in less-liquid fields like high yield bonds. That’s from Howard Marks and it echoes something he’s been saying for years. Namely that an ETF promises intraday liquidity even as in many cases the assets underlying the ETFs are not in fact liquid. As Marks put it back in 2015: The ETF can’t be more liquid than the underlying, and we know the underlying can become highly illiquid. That is the very foundation of my criticism with regard to HY and EM bond ETFs. It is philosophically impossible for something to be mor...
The US dollar is narrowly mixed after selling off following the FOMC statement. Sometimes the narrative explains the price action, and sometimes the price action explains the narrative. This seems to be the case of the latter. The dollar and interest rates fell, and so the Fed was dovish. First, let’s turn to the fall interest rates. At the end of last week, the two-year note yields 1.34%. It rose slightly at the start of the week and fell slightly yesterday. It sits at 1.35% now. The December Fed funds futures contract finished last week with an implied yields of 1.225%. It had risen to 1.24% on Tuesday, but finished yeste...
Written by SmallCapPower.com Vermilion Energy Inc. (VET), based in Calgary, Alberta, is an international oil and gas producer with superior operational and financial metrics. At the current (July 26) market price of $33.39 (US), the stock has an attractive dividend yield of ~6.0% and if oil prices move up, there should also be decent capital appreciation. The Company’s reserves and production continues to grow via organic efforts and selective M&A. As, and when, crude prices start their next sustained up move, the operating and financials metrics of Vermilion Energy would improve significantly. Vermilion shares have been trending lower ...
Income seeking investors know all about the dividend aristocrats. Those are the companies that have been raising their dividends for at least 25 straight years. They’re ideal for retirees and just about anybody else looking for dividend income in their portfolio because of their predictability. They’re not necessarily the highest yielding stocks but their steadiness is their real appeal. Not surprisingly, one sector of the market that is essentially absent from the list of aristocrats is the banks. Any dividends they were paying were essentially wiped out during the financial crisis. Consider for a moment my favorite dividend aristocrat f...
Gold prices rose $10.65 an ounce on Wednesday, hitting the highest level since July 15, as the dollar slipped after the Federal Open Market Committee kept interest rates unchanged. The U.S. central bank also signaled that it could launch its plan to start winding down its massive holdings of bonds. “The Committee expects to begin implementing its balance sheet normalization program relatively soon, provided that the economy evolves broadly as anticipated,” the Fed said in its statement. While the 1264 level triggered some profit taking as expected, the market is challening this barrier again today. The short-term charts are bullish, with ...
Recent Price Action The US Dollar Index (DXY) continued to move lower this week having lost another 1.4% from the previous weeks close. This continued move lower came after the DXY had already lost over 8% from the highs that were struck in January. While the Dollar is still getting hammered on both the charts and in the media the DXY is now coming into a fairly strong support zone that should ideally provide at least some temporary relief from the onslaught that the DXY has seen as of late. Anecdotal and Other Sentiment Indications Last week I had written about the news that was all over the financial press claiming that US Dollar was down b...
S&P 500 The S&P 500 initially was slightly negative during the day on Wednesday, but as the Federal Reserve FOMC statement was coming due, buyers started pushing the S&P 500 higher. Later in the day, we pulled back, as traders would have taken risk off ahead of the volatile announcement. However, when I look at this market we have ended up forming a shooting star for the daily candle which causes a bit of concern. I don’t think we’re going to turn around, but with the Federal Reserve talking about concerned with inflation, perhaps we are starting to see a market that needs to pull back. I think there is a significant amount of...
The Nitfy 50 index representing the stock market in India crosses 10,000 points. It now trades at all-time highs, and is poised to go much higher in the 24 months ahead. No surprise, InvestingHaven‘s research team forecasted this strong bull market last year in several articles, one of which India Stock Market Outlook For 2017, and, last year April, It’s Official: India Stock Market Breakout Is For Real. Based on thorough analysis we concluded that the Indian stock market was the Most Powerful Stock Bull Market Of 2017 And 2018. Interestingly, a couple of months ago, when we wrote that piece, hardly any financial website was bullish o...
If you want to trade macro, you need to understand liquidity. PTJ, Druck, Soros, Dalio — all these legends have expressed this fact multiple times. Liquidity is what moves markets. This is even more true now than in the macro heydays of the 70s and 80s. With the rise of “blind investing” in the form of passively buying and holding ETFs, the majority of investors don’t care about valuation or merit. They just auto-shuttle their excess funds to the nearest robo advisor without a second thought. This amount of “excess funds” is largely dependent on liquidity conditions. When liquidity is loose, it’s cheap to get levered. People...
Hilton Worldwide Holdings Inc. (HLT), a leading global hospitality company with a portfolio of 14 world-class brands comprising more than 5,000 properties with over 825,000 rooms in 103 countries and territories reported exceptional second quarter fiscal results. The company’s portfolio includes Hilton Hotels & Resorts, Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Canopy by Hilton, Curio Collection by Hilton, DoubleTree by Hilton, Tapestry Collection by Hilton, Embassy Suites by Hilton, Hilton Garden Inn, Hampton by Hilton, Tru by Hilton, Homewood Suites by Hilton, Home2 Suites by Hilton and Hilton Grand Vacat...