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Recent Postings

  • The recent correction in the energy sector should continue

    Posted by Larry Berman

    The story for the TSX remains the same, the recent correction in the energy sector should continue in the short run, with longer-term earnings in the sector looking better as distribution channels ope...

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  • The recent correction in the energy sector should continue
    Posted by Larry Berman on 
    Monday, July 28, 2014 2:00 PM

    The story for the TSX remains the same, the recent correction in the energy sector should continue in the short run, with longer-term earnings in the sector looking better as distribution channels open in the coming years. We do see that the sector is currently priced at a long term average price of WTI in the $97 range right now and the average forward price for the next few years is around $95 w...

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  • The Russell 2000 is looking very weak as large caps make new highs
    Posted by Larry Berman on 
    Friday, July 25, 2014 9:55 AM

    The Russell 2000 is looking very weak as large caps make new highs. This is leading to a significant divergence with the broader NYSE advance-decline line that history has shown to end in a broader market correction. Lowry research is amongst the best in terms of breadth analysis and their recent summary confirms that this small cap divergence is playing out in many markets around the world. In Ge...

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  • Expectations for improved longer-term earnings in the energy sector are dominating
    Posted by Larry Berman on 
    Thursday, July 24, 2014 10:22 AM

    The recent 5% correction in the energy sector (XEG) looks to have been pushed aside yesterday and expectations for improved longer-term earnings in the sector are dominating again after reviewing a hand full of analyst reports on the sector. We do see that the sector is currently priced at a long term average price of WTI in the $97 range right now and the average forward price for the next few ye...

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  • Historically, narrowing spreads are negative for oil prices overall
    Posted by Larry Berman on 
    Tuesday, July 22, 2014 11:16 AM

    WTI has bounce sharply over the past week from an oversold dip below $100, but Brent has not bounced as much and spreads are narrowing. Historically, narrowing spreads are negative for oil prices overall. The XEG has not budged relative to the bounce in crude futures, which is another caution signal. Geopolitical risks in some OPEC hotspots like Libya are always tough to forecast as are hurricane ...

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  • Demographics are the single biggest factor for trends in the economy
    Posted by Larry Berman on 
    Monday, July 21, 2014 2:09 PM

    Demographics are the single biggest factor when it comes to trends in the economy and by extension growth and earnings. This story in last week’s Wall Street Journal shows that growth in sales of adult incontinence diapers is exceeding baby diapers. Our point is not to highlight incontinence, but to reiterate that what society does in aggregate drives the economy. Family creation is down and is n...

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  • We recall having to make the daily call on Sept 12, 2001
    Posted by Larry Berman on 
    Friday, July 18, 2014 11:47 AM

    We recall having to make the daily call on Sept 12, 2001. While yesterday’s tragedy in no way compares with the vile raw emotion of 9-11, you somehow have a revolting feeling in your stomach this morning. It was probably a grotesque error of judgment on behalf of a few rebels and we may never know the real truth, but the truth that Russia would like us to have. We wrote in January when the Ukraine...

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  • Canada smells better than lots of other things
    Posted by Larry Berman on 
    Thursday, July 17, 2014 9:51 AM

    Vale came out overnight saying they expect iron ore prices to recover to historical averages and that they have been weighed down by new Australian supply in the first half of the year. Also that Chinese demand will remain strong. We know Goldman talks their book and we can expect Vale does too. So what does that mean for base metals overall today…not much? Many of these stocks including Vale are ...

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  • Goldman Sachs report suggesting the end of the commodity super cycle
    Posted by Larry Berman on 
    Wednesday, July 16, 2014 10:05 AM

    Goldman Sachs put out a report this week suggesting the end of the commodity super cycle. They forecast prices from iron ore to crude oil to copper will be flat to down on average over the next 5 years. A combination of factors that the super cycle created was investment in new supplies, which are now coming on line to better balance supply and demand. Goldman looks for Iron or to be 15% lower, gl...

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  • European banks should not expect the carry trade to be as easy
    Posted by Larry Berman on 
    Tuesday, July 15, 2014 11:39 AM

    Draghi said overnight that European banks should not expect the carry trade to be as easy going forward as it has in the past 2 years. Excess reserves will need to be lent out or they will have to pay. The statement was surreal in that it was like we are still going to give you heroin except now you can’t take it anymore you will need to sell it. In any case, we should be watching the European bon...

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  • Larry Berman & BMO ETFs live webinars this week
    Posted by Larry Berman on 
    Monday, July 14, 2014 8:53 PM

    For those who have registered, we're writing to provide the agenda for your live webinar with Larry Berman and BMO ETFs. If you have not registered yet, we have added two more time options to ensure we have capacity for all who would like to attend (see registration links in the blue box below). Here is the agenda: 1) Understanding how to access ETFs in their many forms.2) Advantages of the new ...

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