After 2 Weeks Of Indecision, Bulls Defend Trendline Support From Last Oct On S&P 500

posted in: Credit, Equities, Technicals | 0

Equity bears came up short last week, unable to take benefit of an opportunity to put the bulls on the defensive. Momentum remains with the bulls. With the S&P 500 having already rallied 28 percent from last October’s low, several … Continued

Even As S&P 500 Dividend Yield Falls Way Behind 10-Year T-Yield, Companies Likely To Resort To Buyback Reduction In Quarters Ahead

posted in: Credit, Economy, Equities | 0

Leading up to the 4Q22 earnings reporting season, the sell-side continues to wax enthusiastic about this year’s earnings prospects. The enthusiasm looks improbable considering the meaningful rise in interest rates last year is all set to filter through to the … Continued

Corporate Bond Issuance Continues To Soften, Can Potentially Impact Buybacks In Coming Quarters

posted in: Credit, Economy | 0

Corporate bond issuance is on pace to decline 14.3 percent this year. This comes at a time when corporations have been aggressively buying back shares. With six months in, US corporate bond issuance remains soft. In June, corporations issued $73.2 … Continued

At Some Point, Increasingly Hawkish Fed, And Its Action, To Result In Flattening Yield Curve

posted in: Credit, Economy, Equities, Technicals | 0

The FOMC meets this week. Stocks are adjusting to an increasingly hawkish Fed, which is belatedly alarmed by the persistently rising inflation. At some point, the long end of the treasury yield curve is likely to cry uncle, putting earnings … Continued

CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned

Following futures positions of non-commercials are as of September 28, 2021. 10-year note: Currently net long 181.2k, up 120k. In February last year, the 10-year treasury yield breached mid-1.40s, before tumbling to bottom at 0.4 percent in the following month. … Continued

Heavily Levered Up, US Corporations Continue To Aggressively Issue Bonds In Risk-On Environment

posted in: Credit, Economy | 0

Corporate bond issuance was strong in the first half. High-yield, in particular, is on course for yet another record year. The Fed essentially provided a backstop to corporate bonds in March last year, setting ablaze risk-on sentiment. Corporate profits are … Continued

Dynamics Between Buybacks, Margin Debt, Foreigners’ Purchases Of US Stocks And Extended Multiples

posted in: Credit, Equities | 0

Buybacks made a comeback in 1Q21. Nonetheless, they are no longer as strong a tailwind for equities as they were in 2018 and 2019. Margin debt and foreigners continue to support stocks, and will pose problems once they turn. S&P … Continued

Hoping Overbought Gets More Overbought, Traders Positioning For Santa Rally

posted in: Credit, Derivatives, Equities, Technicals | 0

With investor sentiment elevated and help from the Fed, margin debt and foreigners, major US equity indexes remain near highs. Bulls are positioning for a Santa rally, followed by the onset of 4Q earnings season in the first half next … Continued

Reversing Earlier Cautious Attitude, Foreigners Increasingly A Tailwind To U.S. Stocks

posted in: Equities | 0

Foreigners, who had been cutting exposure for a while, have been warming up to U.S. stocks of late.  Bulls obviously would like this to continue.  Historically, foreigners’ activity and the S&P 500 have shown a tendency to move in tandem. … Continued