Market Insight

What to look for in February PMI data

By Mark Okada | February 29, 2016 With the volume and speed with which information is exchanged, it has become increasingly challenging to sort through the data available and determine what is and isn’t significant—or as we like to describe it, what are signals and what is noise.   We view the Purchasing Managers’ Indexes (PMIs) that are released monthly by ISM and Markit Group as…

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A Tradable Bounce for US Equities?

By James Dondero | February 16, 2016 While stocks finished last week in the red the broad market averages closed strongly, which suggests the bulls may have wrestled the ball back from the bears. Market internals were also encouraging, showing roughly 50% fewer new 52-week lows than just a few weeks ago. The reason for the strength was due to a long overdue bounce in the…

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Credit Still Matters…

By James Dondero | December 14, 2015 Last week demonstrated a tone of “risk off” in the markets, as investors prepare for the potential of rising interest rates from the FOMC for the first time in 10 years. Both stocks and high-yield bonds were off sharply, in favor of the relative safety of US Treasuries. While the bears have clearly wrestled the ball from the…

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Can High Yield Bonds Bolster U.S. Equities?

By Jim Dondero | October 19, 2015 Stocks had another decent week and continued their advance off their October lows. Stocks continue to face significant areas of resistance just overhead (such as 2,050 on the S&P 500) which — if surpassed — would likely kick-off the traditional Christmas Rally. The potential success of US equities will likely depend on the credit markets. An easy way…

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A Possible Short-Term Bottom for Stocks, However Credit Continues to Loom

By James Dondero | October 2, 2015 Stocks finally had a good week, as both the S&P 500 and NASDAQ held their August 24th lows. Even more important is that both exchanges saw few new 52-wk lows in the (testing) process, which suggests the market has likely put a short term bottom “in place.” That being said, widening credit spreads remain not only a headwind –…

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The Fed Stands Pat

By James Dondero | September 21, 2015 Markets were quite volatile last week, with stocks reacting negatively to the Fed’s decision to keep interest rates unchanged. While the FOMC did make it clear rates were likely to rise by year end, “lower for longer” is the message to which markets are now adjusting. Bonds however, are benefitting from the announcement as the relatively high yields on…

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Markets Await Federal Reserve Decision

By Jim Dondero | September 14, 2015 US stocks finally had a quiet week, ahead of one of the most widely anticipated FOMC meetings ever. While the broad market averages have bounced off their mini-meltdown lows, bottoming is typically a process rather than event and those lows may well see further testing in the days and weeks ahead. Looking around the world, developed markets remain in…

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Bottoming is a “Process,” not an “Event”

By James Dondero | September 08, 2015 US stocks finished the week lower, unable to build on their rally off the Aug 24th lows. Stepping back, while stocks could be quite oversold here, market bottoms are typically a process versus an event, and further bouncing and testing around the August lows would be quite normal. One key to the stock market going forward may be the…

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Testing… Testing

By Jim Dondero | August 31, 2015 US Stocks had another extremely volatile week, and August 2015 will be remembered as one of the worst to investors in many years. More important than the declines themselves is that several market averages have decisively broken key areas of support, and are now putting in a pattern of “lower highs” and “lower lows.” As we also noted last…

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Once again… Credit was right!

By James Dondero | August 24, 2015 US Stocks had a very rough week, suffering their biggest declines since their 2011 lows. Technically speaking, stocks have now decisively broken key areas of support such as 2,050 on the S&P 500 and 1,200 on the Russell 2000. Naturally, US Treasuries benefitted from the volatility, pushing yields on the 10-yr Note below 2% on Monday. Yields traded as…

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