War Premium and the Defensive Stampede

Negative Payrolls, $100 Oil, and a Market That Wants Nothing to Do With Risk

Below is an assessment of the performance of some of the most important sectors and asset classes relative to each other with an interpretation of what underlying market dynamics may be signaling about the future direction of risk-taking by investors. The below charts are all price ratios which show the underlying trend of the numerator relative to the denominator. A rising price ratio means the numerator is outperforming (up more/down less) the denominator. A falling price ratio means underperformance.

LEADERS: THE WAR PREMIUM IS REAL AND DEFENSIVES ARE THE ONLY GAME IN TOWN