Daily Archives: Aug 10, 2018 at 07:58 am EST

Are Low Equity Sector Correlations A Warning Sign For Stocks?

James Paulsen, chief investment strategist at Leuthold Group, sees trouble brewing in the growing disconnect between US equity sectors. He told CNBC earlier this week that correlations among US equities is unusually low and flashing a warning signal. That’s an especially dangerous sign when the stock market’s valuation is so high. Let’s dig deeper into the topic by crunching correlations on the major sector ETFs along with a broad equity market fund.
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Macro Briefing: 10 August 2018

Turkey edges closer to a full-blown financial meltdown: Bloomberg
Senate considers more sanctions on Russia: CNBC
Russia denounces latest round of US sanctions: Reuters
Bloomberg’s US consumer sentiment index rose to 17-year high: Bloomberg
Pence calls for US to develop space force: NY Times
Chicago Fed President: Inflation to hold at around 2%, the Fed’s target: MNI
US jobless claims continue to trend lower, down to low 213,000: MarketWatch
Wholesale trade inventories in US revised up to 0.6% gain for May: CNBC
Don’t confuse a highly valued stock market with an overvalued one: ETF.com
New research challenges loss aversion in behavioral economics: Bloomberg
US producer prices unchanged in July, pointing to tame inflation: CNBC