Current Views

December 13, 2018 - Normally, S&P 500 bear markets coincide with budget deficits. This time, deficit spending has goosed the market late in the business cycle. How ugly will it be for both the market and the budget deficit when the normal correlation resumes? $SPX $SPY Learn More »

December 6, 2018 - Critical macro moves happening again today: Gold up; Chinese yuan down. $XAUCNH up. Further confirmation that the record positive correlation between gold & yuan is unsustainable. When emerging market credit bubbles burst, gold prices rise in local terms. Learn More »

November 30, 2018 - It’s hard to believe the cost of capital remains so cheap for such an unprofitable industry. Every time WTI approached $50 in the last oil bear market, energy junk bonds yielded close to 8%. At similar oil prices today, these yields still have much further to rise. Learn More »

November 28, 2018 - Gold to oil ratio continues to break out with authority. Watch for this ratio. As I said in Nov. 20, previous breakouts coincided with equity market declines. It sends a contradictory signal to this recent melt-up in the S&P 500. Learn More »

November 28, 2018 - Kevin Smith was a guest on the Lance Roberts Show and discussed our current positioning in the markets. Learn More »

November 16, 2018 - Flashing signal of recession ahead: Today’s global yield curve inversion looks just as concerning as the ones that preceded the last two market crashes! We now have 11 economies with 30-year yields lower than the fed funds rate. South Korea just joined the pack last month. Learn More »

November 14, 2018 - The 3-Month Libor vs. Euribor spread is at its highest level since 1999! Is the ECB about to start tightening or the Fed about to stop? Either way, unless “this time is different”, such policy changes from similar extremes is what preceded the last two recessions. Learn More »

November 12, 2018 - Today’s move in oil is a real sign of weakness. It’s like Oct. 2008 when markets completely ignored OPEC’s 1.5mbd supply cut and prices continued to collapse. Remember: in 2016, the 1.2mbd production cut sent oil prices up over 15% for the next 2 days. Not this time. Learn More »

November 2, 2018 - Massive divergence due to elections just caused the spread between Brazilian stocks and emerging markets index to reach its highest level in history! Wonder which one is going the wrong direction… Learn More »

October 30, 2018 - Another one of those eerie resemblances to previous market tops. Global stocks to US Treasuries ratio has now broken down after reaching just 51bps of its record level at tech bubble peak. Learn More »

October 25, 2018 - I am amazed German 10-year Bunds yield 122 bps lower than Fed fund rates at a time when the ECB bond buying spree is set to end shortly. That’s the largest negative spread since 1989! Coincidentally, the same yield disparity preceded the last 3 recessions!!! Learn More »

October 24, 2018 - This is the level of insanity credit markets have reached: Would you ever buy a 30-year bond that yields less than the LIBOR overnight rate? 10 countries offer this great deal. What we have is a massive yield curve inversion globally. Learn More »

October 23, 2018 - Interesting breakdown in oil today. If it’s going to follow EM currencies as it has historically, there is a lot more downside. Learn More »