Displaying items by tag: bear market

(New York)

Bank of America’s Sell-side indicator that tracks equity allocation increased to…see the full story on our partner Magnifi’s site

Published in Eq: Large Cap

(New York)

Bond yields are on the rise, from long-term Treasuries to corporate bonds. However, Ray Dalio, founder of Bridgewater, says…see the full story on our partner Magnifi’s site

Published in Bonds: Total Market

(New York)

Some analysts think that investment grade (IG) bonds might see some very rough times ahead. In fact, one analyst from Pavilion Global Markets says that IG bonds have “virtually no value proposition under any given economic scenario”. Think about the following package of information taken as a whole: 1. iShares iBoxx $ Investment Grade Corporate Bond ETF has lost 6.6% this year; 2. IG yields are well below 6.6%; 3. Investors have been pouring money in IG bond mutual funds and ETFs. So IG bonds are losing value much more quickly than they are yielding, which spells a recipe for disaster to some. According to the same analyst “be mindful of the potential for significant outflows in the days to come”.

FINSUM: We can’t say we agree here. While fixed income as a whole looks fragile right now, the losses have provided room for IG bonds to appreciate as the economy and earnings improve. We do not think it will be all bad news.

Published in Bonds: IG

(New York)

The market has been highly unpredictable of late, with big swings in both directions. While no one knows where the market is headed, one thing is pretty clear: there are a handful of big stocks that look very risky and should probably be avoided. Here is a full list: Carvana, Expedia, Norwegian Cruise Lines, Lyft, Restoration Hardware, Beyond Meat, FirstSolar, Zendesk, BioMarin Pharmaceuticals, and Advanced Micro Devices (AMD).

FINSUM: Carvana and Expedia are the most interesting for us. Carvana is considered disruptive in auto buying and is up 535% in the last year. It is also losing money hand over fist, and its digital-first method of buying and delivery looks less and less effective as the economy reopens (especially because Carvana’s prices for consumers are high). Expedia is more simple: it is up big this year on hopes that travel bookings will recover strongly this year and next. But why is it currently trading at a 40% premium to the S&P 500? Doesn’t make sense to us.

Published in Eq: Large Cap
Monday, 08 March 2021 17:37

BofA says Big Sell Signs are Flashing

(New York)

The post-pandemic bull run has touched the breaks, but not necessarily stopped the momentum. However, Bank of America’s Sell Side Indicator…View the full article on our partner Magnifi’s site

Published in Eq: Total Market
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