Top News Headlines

1. Paris terrorists dispatched; hostage crisis in Mali ends with 27 dead.
2. Stocks have a big week, up over 3%. Fed minutes are dovishly hawk-like.
3. United Health says losing millions on Obamacare, may pull out of exchanges next year.
4. Israeli spy Jonathan Pollard released from US prison.
5. Square prices IPO at half off last private funding round giving lucky IPO buyers a windfall.

Economic News

1. Fed minutes confuse everyone. Some parts dovish long term, mostly hawkish short term.
2. ECB hints again at more easing in December.
3. Yield curve flattening again as short rates anticipate rate hike.
4. Credit spreads resume widening, stocks oblivious.
5. Economic data mostly disappoints, market could not possibly care less.

Random Thought Of The Week

The political left is happy to see people cross borders but would happily restrict the flow of capital and goods. The political right is happy to see capital and goods cross borders but would happily build a fence to restrict the flow of people. I’m afraid that the compromise might be to restrict people, capital and goods.

Chart Of The Week

Economics is messy, rarely offering up a clear view of the economy. The chart below shows that Americans have taken on more revolving debt (credit cards basically) since March than they did the previous three years combined. This could be a positive or a negative and we won’t know until some time in the future. It could be a reflection of confident consumers, readily taking on debt in an improving economy. Or it could be that consumers are using their credit cards because they don’t have cash and this is a precursor to recession. That’s what happened in 2000 and 2007 but pointing that out these days gets you labeled a perma-bear. That might be a clue as to how one ought to interpret the data….but maybe not.

Broad Market Top 10 – 3 Month Returns

MOMENTUM ASSET ALLOCATION MODEL

SPDR Sector Returns – 3 Month Returns

SPDR SECTOR ROTATION MODEL

Country Returns Top 10 – 3 Month Returns

Commodity Returns Top 10 – 3 Month Returns

Bond Returns Top 10 – 3 Month Returns

Stock Valuation Update