ProfitScore Update – June 2023
To the clients and friends of ProfitScore: A recent study from the US central bank has set off alarms in the financial sector, signaling a record increase in American businesses under financial distress and the possibility of intensified ramifications from the Federal Reserve’s war on…
ProfitScore Update – January 2023
To the clients and friends of ProfitScore: January was a good month for both equities and fixed income. After finishing 2022 down more than -18%, the S&P 500 rebounded in January, posting a positive return of 6.3%. Similarly, the U.S. Agg, being down -13.01% for 2022, bounced…
ProfitScore Update – December 2022
To the clients and friends of ProfitScore: Contrary to what most bulls want to hear, the bottom for this current bear market cycle may not be in yet. Historically, a bear market has never ended before a recession has begun. Here is a snapshot of…
How The Fed Put Has Affected Risk Assets
The US Federal Reserve (Fed) asset purchases significantly affect the value of risk assets (equity, commodity, real estate, etc.). We recently completed an extensive research project to learn more about this effect and how we might use this information to better trade the financial markets….
ProfitScore Update – January 2022
To the clients and friends of ProfitScore: The expectation of heightened volatility for 2022 did not disappoint in January. The VIX rose to just short of 32 in late January, its highest level since January 2021, settling at 24.38 by month’s end. According to weekly data published…
ProfitScore Update – December 2021
To the clients and friends of ProfitScore: One of the time-tested valuation measures is the CAPE (Cyclically Adjusted PE ratio) developed by Prof Robert Shiller at Yale. Below is a chart using Shiller’s data. On the x-axis is the CAPE ratio at any given point…
World War C: Illiquidity is CRUSHING Corporate Debt Markets
Cumulatively the markets are at or near record highs in illiquidity. What makes this collapse so devastating is the breadth of illiquidity across most sectors of the market. The Volcker rules that were passed in 2009 to protect banks had unintended consequences. Banks stopped making markets in…
World War C Continues: Quick Update On The Fed’s Battle Lines
The long end of the yield curve, as measured by the TLT ETF, experienced a -9.8% intraday peak-to-valley drawdown on Wednesday. The TLT finally bottomed at 2:40 est. This was the exact time of the Fed’s last auction where it began purchasing 30-year US Treasuries. This auction was unscheduled…