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62% of SP 500 Market Cap Might Have Better Earnings Than You Think (Fundamentalis, 7 min read) Some of the most substantial market cap sectors, technology (25% of SP 500), healthcare (15%), financials (11%), and communication services (11%), are poised to experience less adverse EPS growth due to their fundamentals or nature of their industry.
My New Theory About Future Stock Market Returns (Wealth of Common Sense, 5 min read) Markets have become macro inefficient due to repetitive Fed’s interventions to smooth market crashes. This has made the stock market (artificially) safer and valuations to rise over time. Creating a potential trade-off – the magnitude of future crises will be lower, but the frequency will be higher
The Emerging Emerging-Markets Crisis (Advisor Perspective, 8 min read) Investors have ignored the vulnerabilities faced by emerging market (EM) countries; synchronized global slowdown, EM debt risk, falling reserves, capital flight risk and COVID cases rising in EM. Proof of investor complacency is visible in the largest emerging markets bond exchange-traded fund. Currently, this ETF yields 5%, similar to the beginning of the year.
Relief Rally: Senators As Feckless As the Rest of Us at Stock Picking(NBER, 14-page read) The study examines the stock trading behavior and returns of U.S. Senators from 2012 to 2020. Stocks purchased by senators on average underperform stocks in the same industry and size (market cap) categories by 11 basis points, 28 basis points, and 17 basis points at the 1, 3, and 6-month time horizons.