The Inquisitive Mind

This week’s brutal sell-off has resulted in large declines in many stocks. Looking at broad market statistics, the percentage of stocks which have fallen below key moving averages has exceeded previous corrections since the March 2009 lows. Here are some charts which show how broad the decline has been.
Percentage of Stocks above their 50 Day [...]

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The equity markets continued where they left off yesterday and closed higher across the board, with the Russell2000 and the Nasdaq making new 2009 highs. The markets were led by two calls related to Goldman: the first an upgrade of the financial sector including Goldman, and the second, Goldman’s new target for crude oil for [...]

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The equity markets finally reacted to the broader economic picture after the large gains of the past few days. The ADP employment report which included a steep correction to April’s number, coupled with weaker ISM index of non-manufacturing activity led to a large gap down open in equity markets. News of disagreement about the [...]

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Equity markets spent the day consolidating the gains of the past two days. All major equity indices reached new highs above yesterday’s highs, but could not hold that level. Treasury bonds got a slight bid after yesterday’s decimation. The dollar continued its downward slide with oil ramping up in sympathy. Risk appetite continued to be [...]

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A significant challenge in predicting the outcome of the current economic crisis is that it is global, with multiple stake-holders each with their own interests, but with a lot of inter-dependence. The intertwined nature of the global economy means that no single player can deviate from the norm, without paying a significant price itself.
This [...]

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The world markets got a shock today with S&P lowered its outlook on Britain to negative from stable, a signal that the sovereign AAA ratings may be cut. The primary reason cited was the debt/GDP ratio passed 100%. The market soon acknowledged that the US also has the same risk. This resulted in a sell-off [...]

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Last weekend I had written that the stress test results would not intimidate the market, and it is likely to be a buy the news event. The markets did not disappoint. They bought every leak about the results, and then bought some more after the results were officially released. Though I am a bit skeptical [...]

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On April 27, FT carried an article which showed that an internal study at the Fed suggested that the ideal interest for the current economic situation was -5%.
Today the 2yr-30yr bond yield spread stands at 325 bp.
According to Across The Curve the highest level reached by this spread was 367bp, when the 2 year [...]

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The treacherous bipolar nature of the equity market was visible today. This week’s Job Loss numbers and monthly retail sale numbers from Wal-Mart and Target came better than expected. The ES futures opened near their overnight high of 929.50. However the gap-up opening level could not be sustained. Equities were sold right from the get-go, [...]

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Friday was a see-saw day in the US equity markets. After a gap-up open, most indices under- cut their lows from Thursday’s in the morning session, before bouncing up. They spent most of the day in range-bound trading till a last minute push lifted the SPX above the critical 875 level. Given the gyrations during [...]

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