361 Capital
August 23, 2016
Since 2001, 361 has specialized in delivering distinctive investment strategies.

361 Capital Weekly Research Briefing: Speaking of hikes...

August 22, 2016


(Schwabacher Landing in Grand Teton National Park)

Speaking of hikes…

Since it is the end of August, all financial eyes will turn to Jackson Hole for the annual Fedspeak. While it seems like we get plenty of Fedspeak during the rest of the year, it typically takes on an extra level of importance when so many Fed members are gathered together and wearing jeans and open collared shirts. In the run up to this week’s events, we have had plenty to chew on including a new Fed paper suggesting that the inflation target should be raised, and some members suggesting that most datapoints have recovered to the point where rates could be raised. The market is still suggesting that a Dec/Feb/Mar rate hike is a coin flip, so it seems to be as undecided as the Fed. Yellen is the final voice so maybe we will get some strong guidance from her on Friday. Bulls will be hoping that the only hike she has on her mind is the one that starts with long laces and sunscreen.

Meanwhile, the boring equity markets continue to drift…

While a short-term pullback may still be in the cards, the lack of new 52-week lows shows little significant pressure to the downside. Buyers are still in charge right now.

( Stockcharts )

Seasonally, the market has one more month before the true Q4 buying strength begins…

Sell in May and go away looks to be busted for 2016. The summer wasn’t that bad for U.S. equity investors. You got your beach time and made money in stocks at the same time. Just forget about that one stressful Friday in late June.

( Stockcharts )

An amazing chart of realized volatility which illustrates how paint dries on the NYSE…

@DriehausCapital: ICYMI: Over past 5 yrs there’s 1 day where realized 30-day #volatility on $SPX is lower than it is today—7/2/14. KCN

But while volatility is lacking, the Nasdaq Composite will be working on its 9th straight weekly gain which hasn’t occurred since 2009…



To read the 361 Capital Weekly Research Briefing in its entirety, please visit: http://361capital.com/weekly-briefing/speaking-of-hikes/ 
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