A Complete Overview Of The State Of Global Markets And Where They Are Going

Waverly Advisers Tactical Perspective

Photo: Waverly Advisors

Investment strategists at Waverly Advisors are out with the firm’s latest client presentation giving a complete update on trading in global markets.As correlations remain elevated and markets trade in sync, Waverly says, portfolio diversification has become increasingly difficult and it’s more important now than ever for market participants to keep a “tactical perspective.”

The Waverly presentation looks at recent developments in several global markets and offers some thoughts on where they are likely to go from here.

For more on Waverly Advisors, see here >

Forces are starting to align against the long-term bullish outlook on stocks

But European stocks could be setting up for a strong bounce

In the United States, consumer goods stocks are holding up as good defensive plays

Volatility has not risen much in spite of the bond rally, and it could eventually move to fill the gap

Shorting Treasuries is probably a bad idea

Next time crude prices break down, it will be a good time to short oil again

The short soybean trade is working well, and corn could be next

The correlation between European and Asian markets has only fallen below 0.5 once in the last 6 years

These high correlations are making diversifying a portfolio difficult

A Greek exit is largely priced in, but the Spanish bailout could open a whole new can of worms

The Chinese economy is bouncing for now, but long term, they still haven't addressed major structural issues

And the country just underwent a major leadership transition

The spread between Brent crude and West Texas Intermediate crude should remain wide for a while

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