Allen Li
Research Analyst
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Sector Chartpack: Tech Resilience In The Face Of Surging Yields
As the 10-year yield surged in September, the S&P 500 slipped but only by 0.3%, supported by Technology and Communication Services. We see upside into year end, with bond yields remaining the key risk.
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Cerberus Paribus: The Three-Headed Threat To Equity Valuations (Bonds, Earnings, and IPOs)
We remain constructive on US equities, but higher yields, slower EPS growth and heavy IPO issuance remain significant risks to valuations, leaving the path to our year-end target increasingly dependent on earnings. Tactically, there has already been a significant, but benign, compression in multiples, as earnings have outpaced prices. A well-communicated Fed hike could ease rather than intensify bond-market uncertainty.
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Sector Chartpack: Tech Rebounds, Bonds Under Pressure
Strong second quarter earnings suggest that the AI story is intact. Buoyed in part by this strength, tech stocks have recoupled with healthy fundamentals after a late-July swoon, posting solid August gains. We continue to see upside for the S&P 500, favoring the cyclical and AI exposure of tech, materials, and industrials. But rising bond yields remain the dominant headwind.
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What Is Seasonality Telling Us Right Now?
Historically, midterm years have been rough on equities. Investors should approach September with heightened caution. Since the end of WWII, the S&P 500 has averaged a 1.5% decline from September 1 to its low point, which typically lands in early October.…
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Canadian Stocks Are An Excellent Diversifying Investment
The Canadian stock market’s significant exposure to materials and energy offers valuable diversification benefits. Materials account for roughly 19% of the market and are closely tied to gold prices, while energy represents another 17% and is highly sensitive…
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It’s Tough To Be A Bear These Days
The market’s return to all-time highs is a timely reminder that seemingly irrational optimism is often rewarded by financial markets. Economic resilience, institutional durability, and human ingenuity over the past decade have no doubt caught even some bulls…
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Hedge Stocks… With Stocks?
Investors aiming to reduce exposure to AI-related market volatility should seek refuge in the equal-weight S&P 500. The equal-weight index (EWI) meaningfully outperformed the cap-weighted index during the dotcom bust and delivered strong returns in the two…
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Is A CAD Rebound In The Cards?
The USD/CAD is oversold but faces unique political risk going into the fall. The CAD is one of the worst-performing G10 currencies year-to-date, despite a 30% increase in oil prices over the same time frame. Widening real interest rate differentials between…
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MacroQuant Model Update: Playing With Fire
MacroQuant recommends underweighting equities and adopting a benchmark duration stance in fixed-income portfolios. The model is very positive on the US dollar, bearish on gold, neutral on copper, and bullish on oil.
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Is The US Equity Market In A Bubble?
Based on our bubble indicator, the US equity market is not currently in a bubble. The Nasdaq’s sharp 26% gain since March 30 has further fueled fears that US equities are in bubble territory. However, while conditions are frothy, our indicator sits below the…