As equity market implied volatility grinds lower it’s worth throwing a couple more charts into the mix. In this post we look at ETF bets on the VIX and cross-asset volatility. ETF market bets on the VIX are hanging on despite the headwinds that such products face, it goes to show there are still holdouts despite the continued grind-down in implied volatility. And it’s not just equity market volatility that’s compressing, our measure of implied volatility across asset classes is also falling. It’s almost a certainty that volatility will rise, it’s really just an issue of timing. The ETF products that go into the...
Gold prices surged in the wake of an FOMC announcement that the markets interpreted as dovish. The US Dollar fell alongside Treasury bond yields after the policy statement crossed the wires, boosting the relative appeal of non-interest-bearing and anti-fiat assets. Looking ahead, a lull in top-tier news flow may see momentum slow until second-quarter US GDP figures enter the picture Friday. S&P 500 futures are pointing cautiously higher, so a bit of a corrective pullback may be in the cards if interest rates edge up a bit in risk-on trade. Crude oil prices marked time, unmoved as EIA inventory data showed a larger-than-expected dr...
Hess Corporation (HES – Free Report) is an integrated energy company engaged in oil and gas Exploration & Production (“E&P”) and refining as well as marketing. The company’s E&P activities are concentrated in Algeria, Australia, Azerbaijan, Brazil, Denmark, Egypt, Equatorial Guinea, Gabon, Ghana, Indonesia, Libya, Malaysia, Norway, Russia, Thailand, the United Kingdom and the United States. Currently, Hess Corporation has a Zacks Rank #4 (Sell) but that could change following its second quarter 2017 earnings report which has just released. We have highlighted some of the key details from the just-released announceme...
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...