* 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!