Markets, Trading, and Investment: New Views for the New Week

*  We've seen sectors responding very differently to the recent rise in interest rates.  Banking stocks are at highs ($BKX), while real estate shares are at lows (IYR).  Note the rise in microcap stocks (IWC) since early May.  Large cap shares ($XMI), however, have seen recent weakness and are below those early May lows.  I'm watching the degree to which sectors are moving in unison as a way of gauging broader market moves.  If rising tides aren't lifting all boats (and vice versa), I've found it's worth questioning those moves.

*  Unusually lucid account of the shift from active to passive investment strategies from Abnormal Returns, with particular mention of The Reformed Broker.  Although I must say I have some concerns about how that total bond fund has now become the largest ETF.  The one scenario I don't hear people talking about is a significantly strengthening domestic and global economy creating rising inflation and rates.  That would not be a good environment for long-term bonds.  Note the recent behavior of TLT, for instance.

*  A good perspective on strong versus weak economic data comes from A Dash of Insight.  Note the very interesting economic indicators linked by Jeff Miller, including ones that reflect low odds of an upcoming recession.  Great macro review.


*  As noted by Jeff, here is an unusually interesting timing model that shifts allocations in stages between fixed income and stocks.

*  The relative absence of female money managers is discussed by Abnormal Returns and is the focus of a recent Forbes piece I contributed, which highlights how six of the ten jobs with the greatest discrepancy between incomes of men and women are in the finance industry.

Have a great start to the week!

Brett
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