Displaying items by tag: bear

Friday, 14 December 2018 11:29

Treasury Bears Just Broke

(New York)

There has been a large segment of money managers and investors that have taken a bullish stance against Treasuries. With rates rising and the economy performing well, it stood to reason that yields would keep on rising. However, after a couple of months of brutal stock volatility and worries over a trade war and growth, investors are finally shedding those bearish short positions. The stance was one of the most popular of the year, but the volume of bearish positions has shrunk by two-thirds since from the record it reached in late September.


FINSUM: The ten-year yield now looks more likely to fall than rise given the longer-term economic outlook and trouble in stocks.

Published in Bonds: Treasuries
Friday, 30 November 2018 12:33

Morgan Stanley Says These Stocks Will Tank

(New York)

Morgan Stanley has just published a list investors should probably pay attention to. The bank’s research has chosen ten stocks which it says may tank. It is unusual for bank analysts to have negative views of stocks, but when they do, it is worth listening to. Without further ado, the list is: Abercrombie & Fitch, Avis Budget Group, Bed, Bath & Beyond, EQT, FitBit, Hertz Global Holdings, Juniper Networks, MSG Networks, Seaspan, and Tenneco.


FINSUM: The most interesting ones for us are the car rental companies (Hertz and Avis). They say ride-sharing is a risk, as is a decline in used car values. We agree with the former, but we think the latter is off base because as new car buying slows (as does the economy), used car sales will pick up.

Published in Eq: Total Market
Monday, 07 May 2018 10:28

Why the Future of Stocks May Be Sideways

(New York)

If one thing is clear about markets right now, it is that they have no direction. Volatility has been very high, but not in any one direction, as prices have been bouncing around as if they were inside a pinball machine. In this vein, Barron’s makes the argument that markets may keep simply moving sideways, possibly through 2027. The article summarizes the view this way, saying “With the Fed continuing to raise rates, populism still threatening Wall Street, and baby boomers ditching stocks as they retire, the market could be stuck in a rut until the end of 2027”.


FINSUM: Nine years is a long time to move sideways! In the nearer term stocks may struggle as we are in a mid-term election year. In such times, they tend to do well in the fourth quarter.

Published in Eq: Large Cap
Monday, 22 January 2018 11:23

Are You Ready for a Market Meltdown?

(New York)

Barron’s has published a very curious article. The piece takes a look at the market and spends a great deal of time showing how the current stock market is both technically and fundamentally sound. The economy is good, market momentum is strong, the rally has good breadth—the whole nine yards. Yet, its overall tone is that investors need to be worried, and prepare themselves for the inevitable downturn. One way to prepare would be to cut out the weakest stocks in your portfolio (likely all with gains, but less than others) as these are likely to fall harder than the best performing stocks. Additionally, consider cashing in some chips, and also, importantly, defining clearly when you will pull out, whether it is when a trend line is broken or at a 10% loss etc.


FINSUM: This market is very rich, but also incredibly hard to time (as always). However, there could still be a lot of gains before a correction arrives.

Published in Macro
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