In Friday’s On My Radar, Steve offered his monthly look at market valuations. The data shows that they remain high by most every measure, however Steve says that it doesn’t mean stocks don’t move higher. Click below to see the most recent data.READ MORE
FAANGs Dominate S&P 500
The market cap of the top five S&P 500 companies: $4.1 trillion… The market cap of the bottom 282 S&P 500 companies: $4.1 trillion. Just saying…
NASDAQ’s Jill Malandrino Interviews Steve Blumenthal
Last week, NASDAQ’s Global Market Reporter, Jill Malandrino, interviewed Steve Blumenthal at the Philadelphia Stock Exchange.
Steve discussed the Fed’s recent interest rate hike and its plans for additional increases this year. Steve urged caution, noting that 10 of the last 13 interest rate increase cycles have landed the US in recession. Click below for the full interview and potential moves investors can make to protect and preserve.
Recession Watch Indicators
Recently, we offered current U.S. recession watch charts, including the Employment Trends Index, the Economy and the S&P 500 Index, and Inverted Yield Curve.
It’s critically important to remain vigilant and to check these indicators regularly because the next great buying opportunity could be right around the corner.
The current recessions charts indicate…READ MORE
The Debt Bubble and Interest Rate Trigger
Our equity market trend model signals remain moderately bullish and our bond market trend model signals remain bearish. With that caveat, we’re speeding down the road with limited visibility to the problem that exists just around the next turn. The mother of all bubbles exists and it is in the debt markets. It is global in scale and there is no easy way around the problem. Like bubbles past, this too will pop. The trigger? Rising interest rates.
The debt situation in the U.S. is bad. As of December 31, 2017, it stands at 329% debt-to-GDP. It’s worse in the Eurozone, which is currently at 446% debt-to-GDP. For perspective, credible studies show countries get into trouble when debt-to-GDP exceeds 90%.
But what does this really mean for the economy and for you?READ MORE
Equity Market Valuations and Probable Forward Returns
At which point do rising interest rates spark the fire? Rates are key to the equation of risk. In Friday’s On My Radar, Steve surveys what the current equity market valuations tell us about risk… and likely forward returns. Should you be playing more offense than defense or more defense than offense? Valuations can help.READ MORE
Blumenthal’s 2018 Market Outlook
In Friday’s On My Radar, Steve provides his much-anticipated market outlook for 2018.
Steve says, “The weight of market trend evidence remains bullish. I remain focused on both market momentum and trend evidence. Despite the aged, overvalued and over-bullish environment, as evidenced in Trade Signals each week, I remain moderately bullish on both equities and fixed income.”READ MORE
Blumenthal Interviewed by Nasdaq
On Friday, December 15, CMG Founder and CIO Steve Blumenthal was interviewed by Nasdaq global markets reporter Jill Maladrino. Jill asked Steve about the current state of the market, his 2018 outlook and his recent On My Radar piece called “Start Small, Grow Tall.”
Click below to watch the short interview.
Volatility: Calm Before the Storm?
August and September are the two worst performing months for stocks each year. You wouldn’t know it from the relative calm in the market. From Bloomberg’s David Wilson, “This month’s pattern of calm for U.S. stocks persisted even after Federal Reserve officials laid out plans to begin selling some of the central bank’s bond holdings. The CBOE Volatility Index, or VIX, is headed for its lowest daily average in any September since calculations began in 1990. Wednesday’s 0.4-point decline in the VIX, to 9.78, as the Fed announced the monetary-policy shift.” The all-time low was in early 2007 at 9.39. Readings below 10 are rare.
Here is a look at the VIX Volatility Index since 1999. Imagine the calm confidence that set over the market in 2007. VIX measures perceived risk. We should get worried when everyone is comfortable and see opportunity when others are in fear.READ MORE
Monthly Valuation Update
Every month, Steve reviews several market valuation metrics in an effort to provide visibility into forward 7-, 10-, and 12-year returns. In this week’s On My Radar, Steve looks at Median P/E and also shares GMO’s 7-Year Asset Class Real Return Forecasts. It’s a must-read!READ MORE