2021 Market Sentiment & Positioning

[aiptasia]

so in March 2020 alone you identified meaningful base which typically takes about 6 weeks to form?

I looked for stocks that help up the best compared to their peers. The duration doesn't matter in this case. When there is an uptrend, you just trade along with it.

 

[3dfxplayer]

erm, 10 yr will go up, expect it to be 2-3% easily

and if USD gets stronger, wouldn't that tame inflation since US import more than export?

and US can always remove tariff from china; inflation is not a problem


very useful, thanks

I doubt the fed will allow the 10 yr to go to 3%, 2% is a possibility, Goldman's 2021 forecast for 10 yr is 1.9%.

High PE stocks and "growth" stocks will continue to get crushed if the 10 yr note yield continues to rise. A stock trading at 100x PE has a 1% earnings yield, it made sense to pile into these names when the 10 yr note yield was under 1%, not when its at 1.6% or 2%.

 

[5408854088]

Should a rising 10-year yield scare you out of stocks?

The slow melt-up in the 10-year yield fueled by inflation fears that has spooked some bulls out of stocks in recent weeks isn't that big a deal, contends BMO Capital Markets Chief Investment Strategist Brian Belski.

"The economy is recovering because earnings are going up, the fundamentals are improving so of course, interest rates are going to go up," Belski said on Yahoo Finance Live.

Belski has some compelling historical data to back up his view.

The S&P 500 has posted an average price return of 14.2% during periods of rising interest rates compared to a mere 6.4% average gain in periods of falling rates, Belski's research dating back to 1990 shows. In seven interest rate cycles Belski identified since 1990 in which yields rose for "prolonged" periods, the S&P 500 has had an average annualized price gain of about 15%.

"From our perspective, rising interest rates can mean that the bond market is correctly anticipating future economic growth and staying ahead of inflation — things that typically benefit stock prices," Belski says. "A closer inspection of the data reveals that investors should welcome, not loathe, higher interest rates if history is any sort of guide."

Suffice it to say, Belski is in the minority at the moment.

The yield on the 10-year Treasury has gone from about 1.07% on Feb. 1 to 1.47% presently. Investors have reasoned that with a strong economic recovery later this year as more people get the COVID-19 vaccine, inflation will return. In turn, that will spur the Fed to raise interest rates faster than expected and then depress stock prices.

Investors have used the move higher in yields to lighten their load on risk assets.

Since Feb. 15 — when the climb in yields caught added steam — the Dow Jones Industrial Average has dropped slightly while the S&P 500 has fallen 2.5%.

Selling pressure has been the most acute on the Nasdaq Composite, which is down 7.5% since Feb. 15, as investors model in lower returns for hot tech stocks amid the rise in rates. Some notable former high-flying tech stocks that have turned into laggards since Feb. 15 include Salesforce (-11%), Zoom Communications (-8.3%) and Nvidia (-8%).

https://finance.yahoo.com/news/should-a-rising-10-year-yield-scare-you-out-of-stocks-194128149.html

 

[5408854088]

U.S. 10-yr Treasury yield to hit 1.9% by year end -Goldman Sachs

March 4 (Reuters) - Stronger economic data should push the benchmark 10-year U.S. Treasury yield up to 1.9% by the end of 2021, according to Goldman Sachs’ latest forecast released on Thursday.

Expectations that government stimulus and a countrywide coronavirus vaccination program are fueling an economic rebound in the United States have pushed Treasury yields higher in recent weeks, a move that has reverberated throughout global markets and weighed on U.S. stocks.

The 10-year yield, which began 2021 at 0.930%, hit a high of 1.614% on Feb. 25 and was trading around 1.55% on Thursday.

“While we think there will be some near-term consolidation, we believe strong economic data will lead yields to resume their upward trajectory in the coming quarters, and we therefore revise up our projections,” a Goldman Sachs Economics Research report said.

The 10-year yield last reached 1.9% in January 2020, which was before the full force of the coronavirus pandemic hit the U.S. economy and the Federal Reserve took action to cut interest rates to rock bottom levels. Recent data has shown some signs of economic improvement as the roll out of COVID-19 vaccines is underway.

Rising Treasury yields tend to dim the allure of stocks and other comparatively risky investments. Wall Street ended sharply lower on Thursday, leaving the Nasdaq down around 10% from its February record high, after remarks from Federal Reserve Chair Jerome Powell disappointed investors worried about rising longer-term U.S. bond yields.

Goldman Sachs also forecast the 10-year German bund yield , which has been in negative territory since May 2019, to rise to 0% by year end. It was last at -0.311%.

The 10-year gilt yield, which was last at 0.733%, was projected to climb to 1.10%, while the 10-year Japanese bond yield, currently at 0.136%, was seen reaching 0.3%.

Goldman Sachs also projected that the breakeven inflation rate on 10-year Treasury Inflation-Protected Securities could be boosted to 2.4% to 2.45% from the current level of about 2.2% due to “the combination of an on-hold Fed, strong realized inflation, and a substantial reduction in slack.”

https://www.reuters.com/article/usa-bonds-goldmansachs-idUSL2N2L239O

 

[decibel.]

will you guys consider this a safe strategy? To find out how long each of the past 10 corrections take to hit the bottom before reverting to the midpoint between pre-correction and the bottom?
then you can agar agar decide when to start dca in.

Posted from PCWX using my high crass Redmi K20 Pro

My AI script already does that. Past results don't determine future. So far the bot accuracy only 50+ %

Sent from HUAWEI VOG-L29 using GAGT

 

[5408854088]

8 things every investor should know about Asia-Pacific REITS in 2021

https://fifthperson.com/asia-pacific-reits-2021/

 

[Entry Level PC]

My AI script already does that. Past results don't determine future. So far the bot accuracy only 50+ %

Sent from HUAWEI VOG-L29 using GAGT

yup if so simple, AI auto trading can liao.
no need human trader.

 

[moolala]

yup if so simple, AI auto trading can liao.
no need human trader.

thought algos are trading the market ??

 

[audiovideo]

Wah everybody AI expert

 

[limster]

wah got many here type wall of text...

But I think limster is trader earn big money with big account

sorry not trader - I don't know how to trade. I tried before, made small money only, not worth the stress and having to constantly monitor. my new year's resolution is to go for ETF, buy and hold forever, and collect the dividend

 

[revhappy]

FTSE, STI & XLE are doing well, these were doing horrible last year. Damn, I had all 3 last year and I got out of them all this year. FML. Whatever I buy goes down and whatever I sell goes up.

 

[focus1974]

this is a pretty much FML moment again.. every year also encounter this..

I gave back $700k of paper money... and now is back to the 6 digit profit club.

really is ..sibei sianz...

so how now?

Hold or Sell?

What would you do?

 

[Entry Level PC]

this is a pretty much FML moment again.. every year also encounter this..

I gave back $700k of paper money... and now is back to the 6 digit profit club.

really is ..sibei sianz...

so how now?

Hold or Sell?

What would you do?

whatever helps you sleep tonight.

 

[slowmover]

this is a pretty much FML moment again.. every year also encounter this..

I gave back $700k of paper money... and now is back to the 6 digit profit club.

really is ..sibei sianz...

so how now?

Hold or Sell?

What would you do?

Half cash hold half and do repositioning
for tickers that I have more confidence in is what I'm currently doing for the past week.

 

[d9_lives]

this is a pretty much FML moment again.. every year also encounter this..

I gave back $700k of paper money... and now is back to the 6 digit profit club.

really is ..sibei sianz...

so how now?

Hold or Sell?

What would you do?

Hold la.
The best time to sell was 2-3w ago.

Such is life.

 

[paladin]

I can only say I can make donation to church soon. I sold half my holdings at peak around Feb 15 to move my funds from scb to tiger brokers, so I suffer only 10-15% loss from peak although I have basically 100% tech holdings . Really lucky. During this period, also made my first short and covered call, and earned from it to make up for losses from buying the dip but I closed my sunpower short too soon, shorted at $48 and closed at $39, now it’s $28.

This correction has been training ground for me for different strategies, really completely new experience, hope the experience will bear fruit in the years to come....

Always remember, market>sector> individual stocks, no matter how good the stock is, if market is against you, dun fight it, go along with it and brush aside your ego that market has proven you wrong.

 

[Entry Level PC]

Hold la.
The best time to sell was 2-3w ago.

Such is life.

After 17 Feb the big laosai.

 

[Entry Level PC]

I can only say I can make donation to church soon. I sold half my holdings at peak around Feb 15 to move my funds from scb to tiger brokers, so I suffer only 10-15% loss from peak although I have basically 100% tech holdings . Really lucky. During this period, also made my first short and covered call, and earned from it to make up for losses from buying the dip but I closed my sunpower short too soon, shorted at $48 and closed at $39, now it’s $28.

This correction has been training ground for me for different strategies, really completely new experience, hope the experience will bear fruit in the years to come....

Always remember, market>sector> individual stocks, no matter how good the stock is, if market is against you, dun fight it, go along with it and brush aside your ego that market has proven you wrong.

Cash is King.
Buy the Dip or divest reinvest in stocks with stronger fundamentals.

 

[Lex1989]

this is a pretty much FML moment again.. every year also encounter this..

I gave back $700k of paper money... and now is back to the 6 digit profit club.

really is ..sibei sianz...

so how now?

Hold or Sell?

What would you do?

Easy come easy go, S$700K can buy new Ferrari.

 

[revhappy]

Easy come easy go, S$700K can buy new Ferrari.

Yes, the way people were making money, this is like once in a generation thing. The last time such frenzy happened was during dotcom bubble. It was that crazy. I think the bubble has started deflating already. Better to just take whatever profit is there and wait for things to settle. Aiptasia is right. Follow him