CEO’s Don’t Buy The Recovery

Entrepreneurs and senior managers don’t believe that the rebound is sustainable. Soft and hard facts hint to that conclusion. CEO’s sentiment has been softening most recently. Their outlook for the next twelve months deteriorated significantly in November. Moreover, the demand for commercial and industrial loans has not recovered yet. Credit growth typically signals that the private sector …

Long-Term Equity Valuations

The stock market cap to GDP ratio is among Warren Buffett’s favorite macro gauges. It surpassed the previous 2000 and 2007 extremes. Both are linked to bubbles: the tech bubble in 2000 and the housing bubble in 2007. The gauge was mean-reverting historically. Its long-term average is below one relative to the Wilshire 5k index. …

2020 – Bear Extinction

There is not much more rally potential from squeezing the shorts. Bears capitulated as the S&P 500 short interest continues to fall. The Goldman Sachs gauge reveals that short positioning in US blue-chips is the lowest in more than 17 years. Extreme sentiment/postions are associated with subsequently surprising asset returns to the opposite direction of …

Moderna’s CEO Unloads Stocks

Stephane Bancel dumped more than 100,000 stocks of his Moderna¬†holdings during the past 4 weeks. Nothing unusual if he wasn’t the firm’s CEO and the biotech company reported a 95% covid-19 vaccine efficacy today. Optimists might argue that he crossed the shares with a market maker counterparty as a delta hedge because he just purchased …

Insiders Sold The Rally

Control persons (significant equity ownership) lightened up on their equity holdings. The Insider Transactions Ratio reached bearish territory in early November. Subsequently, a significant reversal unfolded and carried the index back to neutral territory. Insider sentiment is, contrary to investor sentiment, a conformist and not a contrarian indicator.