Monthly Archives: January 2014
Will the Super Bowl Theory Hold Up This Time?
Every once and a while there are some events which are totally irrational, but they happen. You toss a coin in the air and it comes up heads five times in a row. The chances of it being heads on the next toss is still 50% – but five in a row. In the market…
- Categories Equities
- Categories
- Equities
COMMODITY ZODIAC: Prosperous Horse
Happy Chinese New Year for all celebrating! As a special tribute, this post will focus on the fact that all 5 commodities that start with the letter “c” (the same letter China starts with) in the S&P GSCI Agriculture and Livestock have had positive returns in 2014. I picked the agriculture and livestock to symbolize the importance…
Housing Finance: Déjà vu All Over Again
Bonds May Puzzle But Stocks Could be Worrisome Bonds: Just when people thought we were safe from creative financing applied to bonds backed by homes, a new improved approach is about to surface. The past year has seen an increase in buying homes for rent by private equity funds and others. The private equity buyers…
- Categories Blitzer's Insights, Equities, Fixed Income, S&P 500 & DJIA
- Tags Home Prices
- Categories
- Blitzer's Insights, Equities, Fixed Income, S&P 500 & DJIA
- Tags
- Home Prices
The Shrinking US Federal Budget Deficit
The US federal budget has a reasonable probability (our base case scenario) of reaching operational balance – revenues equal expenses excluding interest expense – by FY2015. This is an amazing turnaround and it means that budget deficit is now shrinking faster, meaning reduced supply of US Treasuries, even as the Federal Reserve tapers its quantitative…
- Categories Commodities, Equities, Fixed Income, S&P 500 & DJIA
- Tags Economic Update
- Categories
- Commodities, Equities, Fixed Income, S&P 500 & DJIA
- Tags
- Economic Update
S&P Dow Jones Indices CEO, Alex Matturri, Speaks to Bloomberg TV on Asia Business Outlook
S&P Dow Jones Indices CEO, Alex Matturri, sits down with Bloomberg TV in Hong Kong to discuss SPDJI’s business objectives in Asia-Pacific for 2014.
- Categories Uncategorized
- Categories
- Uncategorized
Where VIX Comes From
At work, I am sometimes asked this simple but challenging question: “Where does VIX come from?” There is a reason I am asked this – I am our company’s product manager for volatility indices. But I admit that I have struggled to come up with an approachable way to explain the methodology of the CBOE…
- Categories Strategy
- Tags VIX, volatility
- Categories
- Strategy
- Tags
- VIX, volatility
Dispersion and Correlation: Which is “Better?”
We recently introduced the concept of dispersion, which measures the average difference between the return of an index and the return of each of the index’s components. In times of high dispersion, the gap between the best performers and the worst performers is relatively wide; when dispersion is low, the performance gap narrows. Today’s dispersion…
A NICKEL For Your Thoughts?
Industrial Metals are historically the most economically sensitive sector besides energy. While Chinese oil demand growth is set at 3.6% in 2014 and HSBC’s Chinese Manufacturing Purchasing Managers’ Index (PMI) edged down to 50.8 in November, barely above the key 50-threshold delineating expansion from contraction, according to IEA’s OMR Report, nickel is the only commodity in petroleum and industrial…
Nat Gas Is HOTTEST In 4 Years
Every conversation I’ve had today with people from Nashville to Toronto has started with how cold it is outside. After the shock of the cold and when the heating bills come due, the conversation may turn to how expensive heat was in January. That, of course, is at least for those who don’t invest in…
Low Dispersion Implies Low Value Added
Understanding a market’s dispersion provides important insights into its internal dynamics and the opportunities and pitfalls that might await both active and passive investors. Dispersion measures the average difference between the return of an index and the return of each of the index’s components. In times of high dispersion, the gap between the best performers…