Covering the Spread

Covering the Spread

  The idea behind this week’s indicator is that corporate bond spreads can be used to anticipate changes in stock market earnings. This is because, historically, widening spreads are associated with economic weakness and poor earnings growth rates, while...
Hot Commodities

Hot Commodities

  This week’s featured indicator uses the Reuters-CRB Continuous Commodity Index (CCI) to measure inflationary pressures and how that affects stock prices. The CCI represents the average price of 17 commodities. It includes many of the major commodities we are...
It’s All Relative

It’s All Relative

  For this week’s indicator, we feature a chart showing the relative valuation of stock dividends and Treasury bond yields. The idea behind the indicator is that stocks and bonds compete for investor dollars. So by comparing their yields, we can get a sense of...
Gaining/Losing Leverage

Gaining/Losing Leverage

  For this week’s indicator, we look at margin debt and how we use it to measure market sentiment. Margin debt is a measure of the amount of stock market borrowing that investors are doing with their brokerage accounts. When there is an increase in margin debt,...
Income Competition

Income Competition

  When it comes to generating income in retirement, an investor has two primary choices: stocks and bonds. A bond is straightforward; the income comes from the bond’s yield. On the other hand, stocks throw off dividends, which have the potential to be lucrative...