At present the markets are doing an extraordinary job outlining exactly what matters moving forward. Any level of analysis whether fundamental, technical, contrarian, qualitative, quantitative or otherwise, serves only to confuse an extraordinarily simple message.
Interest rates are now at a point where they are disruptive in nature, creating a headwind that the markets are not sure how to deal with. The very simple equation moving forward is that when interest rates decline, equities will have the green light to rally. When interest rates rise, equities will be sold.
Of course, the markets being creatures of consensus subversion, the moment investors catch onto any correlated behavior, filing it away in the common knowledge library, markets will alter their course in a new direction. In other words, interest rates rising will not cause the markets to fall forever. In fact, the next long-term phase of this secular bull market will come with dramatically higher rates, followed by dramatically higher equity prices. A subject of another piece, when time permits.
For the time being, however, the markets have spoken. Q3 earnings may cause individual names to outperform on a case by case basis. Those looking for a uniform lift in the markets from earnings, however, will be disappointed as the fiddler is playing a new tune for investors to dance to.
As for interest rates, the recent acceleration to the upside on the ten year is a clear signal of a secular shift. There are some key technical levels ahead on the 30 year that will further confirm the shift. The 3.5 - 3.7 percent level on the thirty year are key levels.
Game. Set. Match.
_______________________________________________________________________________
From time to time, I email individual company research, commentary and excerpts from my monthly investor letter to those who are interested. If you would like to receive future emails, please write me at mail@T11Capital.com
Disclaimer
This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice.
This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website.
T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution or use would be contrary to the laws or regulations of that jurisdiction, or which would subject T11 Capital Management LLC to any unintended registration requirements. Visitors to this site should not construe any discussion or information contained herein as personalized advice from T11 Capital Management LLC. Visitors should discuss the personal applicability of the specific products, services, strategies, or issues posted herein with a professional advisor of his or her choosing.
Information throughout this site, whether stock quotes, charts, articles, or any other statement or statements regarding capital markets or other financial information, is obtained from sources which we, and our suppliers believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Neither our information providers nor we shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or for any delay or interruption in, the transmission thereof to the user. With respect to information regarding financial performance, nothing on this website should be interpreted as a statement or implication that past results are an indication of future performance.
