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Jul 08 2021

Music For The “Mania”

  • Jul 8, 2021

At some point during the June/July streak of seven-consecutive S&P 500 daily-closing highs, an album from 1980 popped into our heads: Nothin’ Matters And What If It Did—released when John Mellencamp was still known as John Cougar. It brought to mind some “nothin’s” that seem not to matter.

May 07 2021

Stock Market Observations

  • May 7, 2021

The speculative peak for this market rally may have occurred in either January (when GameStop and other “left for dead” short candidates soared), or February (when indexes tracking the “newborns”—IPOs and SPACs—both peaked). But even if we knew that for certain, a major peak in stock prices could still be months away.

Feb 19 2021

Has Liquidity Peaked?

  • Feb 19, 2021

The last few weeks offer plenty of evidence that the mania has moved into a more feverish phase, yet the Fed insists that it is still “not-even-thinking-about ‘thinking about’” raising interest rates. That dismissive attitude could well whip up an even higher fever in the months ahead.

Dec 05 2020

High Tide?

  • Dec 5, 2020

For almost nine months, an historic Fed liquidity flood has washed away any economic, valuation, technical, or “sentimental” stock market challenges. Nonetheless, each economic disappointment brings hope this flood will intensify. Those hopes aren’t irrational, because when it comes to any measure of liquidity, rate of change is more important than level.

Dec 05 2020

A “Fed” Conundrum

  • Dec 5, 2020

“Don’t fight the Fed” has been great advice for stock market investors over the last nine months. For 2021, that won’t cut it. It should be: “Don’t believe the Fed.”

Nov 06 2020

Liquidity: As Good As It Gets?

  • Nov 6, 2020

Stock market manias thrive on buzzwords, and if there’s a single one that captured the essence of the late 1990s’ boom it was “productivity.” In today’s version, our top candidate is “liquidity”—and we doubt anyone would argue.

Jul 08 2020

Everyone Loves A Winner

  • Jul 8, 2020

The bullish consensus seems to be that unlimited Fed liquidity will lift all stock market and economic boats. However, past liquidity floods have tended to lift boats that were already the most buoyant. The “Y2K Liquidity Facility” and last fall’s emergency Fed intervention in the overnight repo market are two cases in which liquidity seemed to flow to where it was needed the least.

Apr 07 2020

A Cross-Asset Dash For Cash

  • Apr 7, 2020

March’s mad dash for cash didn’t stop with rates/credit/FX markets. Among equities, there was also a strong preference for cash liquidity. The market rewarded companies that had strong cash positions and punished those without—which explains why traditionally defensive styles actually underperformed.

Feb 07 2020

Liquidity Overflow!

  • Feb 7, 2020

Based largely on the bearish trends in our monetary and liquidity measures, we were correctly negative on stocks throughout most of 2018. It’s therefore especially painful for us that 2019’s market rebound has been credited almost entirely to the “pivot” in most of those measures.

Aug 07 2019

Who Doesn’t Love “Excess” Money?

  • Aug 7, 2019

We’d concede the monetary backdrop for stocks is now mixed, an upgrade from the almost uniformly negative environment of last fall. On the negative side, the U.S. yield curve inversion has now persisted long enough that even the economic optimists are getting nervous.

Jan 08 2019

About That Great Jobs Report...

  • Jan 8, 2019

The December employment report temporarily eased fears of a severe U.S. slowdown. That’s a mystery to us.

Dec 07 2018

It’s About Money, Not Profits

  • Dec 7, 2018

The consensus focus all year has been on the boom in U.S. corporate profits.

Nov 23 2018

Thanksgiving Leftovers

  • Nov 23, 2018

Whatever one’s preferred leftovers from yesterday’s feast, the odds are good you’ll find them more appetizing than the slop served up by global asset markets this year. Stocks have obviously been turkeys, but all the surrounding trimmings that help diversify a portfolio have proven anything but complementary to the main course.

Oct 05 2018

Stocks Not Yet Yielding To Yields

  • Oct 5, 2018

Regardless of how it’s measured, the liquidity available for global stocks continues to run off.

May 05 2018

Earnings Soar While Liquidity Circles The Drain

  • May 5, 2018

Question: How can you be cautious on the stock market with recent earnings results so spectacular?

Apr 06 2018

“What, Me Worry?”

  • Apr 6, 2018

Our shortest-term put/call measure has yet to reflect the level of fear usually triggered by a correction of this size. Meanwhile, the market setback has done almost nothing to stymy the optimism of either market newsletter writers or mutual fund timers.

Jan 06 2018

Pressure Points?

  • Jan 6, 2018

The first few trading days of the new year have been a seamless extension of 2017—a low-volatility, “measured” market melt-up.

Dec 22 2017

Market Thoughts In The "Season Of Excess"

  • Dec 22, 2017

While investors look high and low for signs of excess that might portend the next bear market, they should pause and consider the excesses that have recently gone away.

Feb 07 2017

Stock Market Observations

  • Feb 7, 2017

The Major Trend Index stabilized in a moderately bullish range during the past several weeks, yet the Momentum/Breadth/Divergence category is almost the sole carrier of the bullish torch.

Aug 07 2015

Fed Watching For The 21st Century

  • Aug 7, 2015

Deteriorating stock market breadth and worrisome leadership trends both suggest liquidity has already tightened; whether the Fed follows suit in September may now be just a formality.

Dec 05 2014

Stuck In Neutral?

  • Dec 5, 2014

Extreme market viewpoints get the headlines, but it’s baked into our disciplines that we will (occasionally) be noncommittal.

Nov 07 2014

Stocks Vs. The Dollar—More Complicated Than You Think

  • Nov 7, 2014

The recent strength in the dollar coincided with a spike in volatility and weakness in risky assets, but the relationship over the last couple years has been tenuous at best.

Jan 08 2014

Emerging Markets: Dismal 2013, Hopeful 2014

  • Jan 8, 2014

What worked, what didn’t; what you need to consider for investing in Emerging Markets this year.

May 04 2010

Liquidity Update: Trends Worth Watching

  • May 4, 2010

Helping propel the stock market recovery has been a build-up of excess liquidity. This has now generally been put to use, and can no longer be counted on as a market driver.

Feb 02 2010

Liquidity Drying Up… Some Trends Worth Watching

  • Feb 2, 2010

Our broad read of the stock market is still bullish, but we can’t help noticing that the concerted effort to supercharge the economy via liquidity may be losing some steam.

Nov 04 2009

Market Liquidity: Down But Not Out

  • Nov 4, 2009

What will be one of the key performance drivers for  the second half of the bull market? The short answer is the same catalyst that brought the stock market down during the latter half of the last bear market: Liquidity.

Dec 02 2008

Think There's No Fuel For A Rally??.....Better Think Again

  • Dec 2, 2008

Using the ratio of MZM relative to total stock market capitalization as a gauge of market liquidity, shows there is a lot of fuel that can be put to work to drive a stock market rally.


Jul 04 2003

Swimming In Liquidity...Fuel For A Thirsty Bull

  • Jul 4, 2003

Another bullish sign is huge buildup of cash now sitting on the sidelines earning 0.7% in interest. As investors put this money to work, stocks should move higher.

Feb 05 2000

Market Volatility...Market Liquidity

  • Feb 5, 2000

Billion share days, but a dearth of liquidity for institutions, as market makers contract commitments and ECNs fragment the market.

May 05 1999

Understanding MZM…It May Not Represent What You Think It Does

  • May 5, 1999

Much of the movement in MZM levels is not directly related to Fed policy. Stock market performance may be the primary driver, as investors and institutions move assets between the stock market and cash market.

Jul 05 1997

View From the North Country

  • Jul 5, 1997

The market mechanism is being increasingly overwhelmed by the sheer size and trading practices of today’s institutional players.

Jun 05 1994

View From the North Country

  • Jun 5, 1994

How Bush and the boys rescued the banks without busting the FDIC, fiscal responsibility in the 1993 Congress is examined and what the recent surge in commodity inflation means.

Aug 01 1987

The “Bottomless Pool of Liquidity”

  • Aug 1, 1987

This morning on television, I heard a Wall Street pundit proclaim that “the stock market has a bottomless pool of liquidity”. No doubt, when investor fear replaces investor greed, you will hear about the stock market being a “bottomless pit”.

Apr 01 1987

Liquidity Considerations

  • Apr 1, 1987

The stock market might still go higher, but at least some elements of the liquidity thesis are no longer quite as valid as they were even a month or two ago. More and more, the liquidity driven case is narrowing down to the waves of cash rolling across the Pacific.

Mar 01 1987

Client Questions

  • Mar 1, 1987

Recently, the majority of questions have, not surprisingly, concerned the liquidity driven market thesis. In second place are questions relating to today’s market and 1929.