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Brake Lights Ahead?

By May 4, 2015November 19th, 2015Market Insight, News

By Jim Dondero | May 4, 2015

  • Stocks again struggled to make headway last week, with the S&P 500 and NASDAQ unable to move beyond their Feb highs. We believe this loss of momentum is akin to brake lights ahead of you on the freeway. Sometimes it leads to meaningful slowdown and sometimes not. You can only tell however when you get a little further along (and see whether or not 50 and 200-day moving averages hold).
  • Bonds also appear as if they may be nearing a turning point, or at least transitioning from ‘declining’ to ‘moving sideways’. Greek yields on the other hand have been easing the past few weeks, and are possibly suggesting a resolution to the countries debt crisis might be near.
  • Recent weakness in the US Dollar may be the reason, and based on our analysis the greenback may finally be ready to consolidate their recent gains. Both base metals and crude oil saw significant jumps last week, possibly portending renewed economic growth around the globe.
  • Strength in overseas equity markets paints a similar picture and we believe pullbacks such as the one we are now seeing in Germany might represent an attractive entry point into a market with bullish fundamentals and which is in an established up trend.