There are some recurring themes this week in our highlighted charts, debt and leverage will overhang any global economic discussion; however, we see some interesting dislocations that can offer global macro opportunities:
- Short yields are now higher than dividend yields.
- Growth stocks continue to outperform value.
- The yield curve continues its slow flattening march.
- EM stocks are diverging from developed markets.
- Wealth, as measured by the equity market cap, is falling.
- An increasing number of firms are losing money.
- Copper prices signal an economic slowdown.
- Global PMI, albeit still above 50, is moving lower.
Dislocations offer opportunities for exploiting trends or betting against herd wisdom. This will not happen if markets are range-bound. Dislocations are attention focusers. These are the places I will be spending my research time.