Month: December 2014

2014: The Year in Charts

  • Markets
  • Charlie Bilello

These are the charts and themes that tell the story of 2014. Lower For Longer: The Easy Money Regime The Fed Funds Target Rate was held at 0% for a sixth consecutive year, an unprecedented period of easing. Still, the Federal Reserve remained dovish, promising to be “patient” for a “considerable time” before raising interest […]

The efficient-market hypothesis (EMH) requires that investors have “rational expectations,” that on average the population is correct and whenever new information appears, expectations are updated appropriately. Nice theory, but in the real world investors are anything but “rational.” As human beings, we tend to overreact to new information, behaving in an irrationally exuberant or irrationally despondent fashion. […]

It’s the end of the year and you know what means: it’s prediction time. Everyone loves a good forecast, and specific targets at a future date tend to get the most attention. Predicting exactly where the markets are going to be a year from now is of course an impossible task, but that never stopped […]

Momentum, Thy Name is Healthcare?

When you read the word “momentum,” what’s the first sector that comes to mind? I’m guessing it wasn’t Health Care. Looking at today’s market, though, there is no question about it – healthcare has become a momentum sector. We can see this clearly in looking at the largest momentum ETF from ishares (MTUM), which now has almost […]

The New Tech: Changing Sector Behavior Over Time

  • Sectors
  • Charlie Bilello

Industries change. Companies change. Valuations change. It should come as no surprise, then, that sector behavior in the stock market can change as well. Let’s take a look back at the ten S&P 500 sectors since data became available in October 1989. Defensive vs. Cyclical We generally break down the sectors into two main categories […]