9 Anomalies Currently Occurring In The Market

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Credit Suisse’ Andrew Garthwaite has come up with a list of market anomalies, which he suggests should be the focus of your investment ideas.There are some fertile ideas here.

We summarize most of them.

  • Bond yields have sharply decoupled from risk assets, and from accelerating US loan growth. Garthwaite expects yields to eventually rise.
  • US corporate credit spreads still appear to be pricing in a recession, whereas European spreads aren’t.
  • Sentiment is optimistic, but actual fund positioning is positioned bearishly. That’s a sign to buy on dips.
  • Mining stocks have done well despite weak performance in Shanghai.
  • European cyclicals have performed as well as US cyclicals, despite poor economic outlook in Europe.
  • Dividend yield isn’t doing that great, given low bond yields.
  • Oil has abnormally lagged PMI.
  • Italian bonds are still trading way above France.
  • Equity housing bets have done well but the sub-prime ABX has not.

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