TOPLEY’S TOP 10 April 05 2024

1.Equities Shine Over Bonds-Bespoke

Helped mainly by the massive gain since late October, the S&P 500’s one-year trailing total return through the end of March clocked in at an eye-watering 30.5%, or nearly triple the historical average of 11.8%.  While the rally over the last year has been well above average, it followed a period of weak returns in the prior year.  When you combine the last two years, the S&P 500’s annualized gain of 9.7% is nearly a full percentage point below the long-term historical average.  Looking out over the last five and ten years, annualized returns have been well above average, but over the prior twenty years, the S&P 500’s performance has been sub-par.

Equity market returns may have been below average over the last two and twenty years, but you won’t find many equity investors looking to trade shoes with investors hiding out in long-term (LT) US Treasuries.  The chart below shows the annualized total return of the Bank of America/Merrill Lynch index of 10+ Year US Treasuries over various timeframes.  Over the last year, LT Treasuries declined 4.8% versus a long-term average annualized gain of 8.1%. If you think that’s bad, check out the two-year annualized decline of 13.1%…in Treasuries!  That’s a 25% haircut!  Even over the last five years, LT Treasury returns have been negative to the tune of 1.6% annualized. To find – not better than average – but simply positive returns, you have to go out to the ten-year window, where the total return is just 1.6% annualized and still seven percentage points less than the historical average.  While technically not a lost decade, it’s been a loser of a decade for sure.

2.Best and Worst ETFs Q1

Nasdaq Dorsey Wright

3.Buybacks Huge Part of Demand for Stocks.

The Daily Shot Brief Equities: Goldman sees share buybacks driving demand for stocks this year.

Source: Goldman Sachs; @WallStJesus

4.FANG+ Stocks Held Above 50day Since Nov 1 2023

5.$21 Trillion in T-Bill Issuance Past 12 Months-B of A Research

6.S&P Metals and Mining ETF Closing in on 2022 Highs.

7.Growth vs. Value

Barrons Active funds now have 56% less exposure to value investments than to momentum factors—a 15-year low, according to Subramanian. “Funds looking for cheap stocks based on low price-earnings valuations is at a “max underweight,” she adds. “A brain drain and asset drain, with 40% fewer funds, from active fundamental to passive and private suggest markets may be less efficient and offer more alpha potential.”

Value has had its share of false starts. But Subramanian writes that value is historically cheap at a time investors could become more attuned to the price they are paying for stocks.

Over the last decade, roughly 150 active large value funds have gone extinct, Morningstar’s Director of Manager Research Russel Kinnel said via email. That could mean a bigger opportunity for those stockpickers who stuck with value if this turnaround materializes.

Write to Reshma Kapadia

Russell 1000 Value cheaper than Growth but IWD broke out of 5-year holding pattern

8.55% of Americans Don’t Have CC Debt.

Ben Carlson According to the Fed, 45% of American households have credit card debt. That number has been relatively stable over time:

9.Old School Heist $30m

Tens of millions stolen from money storage facility in one of the largest cash heists in Southern California


Thieves stole tens of millions of dollars from a money storage facility in what is being called one of the largest cash heists in Southern California.

The robbery happened on Easter Sunday at a GardaWorld facility. NBC Los Angeles reported that it occurred in the 15000 block of Roxford Street in Sylmar in Los Angeles’ San Fernando Valley.Burglars breached the building as well as the safe where the facility stores money, Los Angeles Police Department Cmdr. Elaine Morales told the Los Angeles Times.While the Times reported that as much as $30 million was taken, multiple law enforcement sources familiar with the matter told NBC News they are trying to assess exactly how much money was taken.

Morales did not respond to a request for comment on Thursday, and a spokesperson for the LAPD would not confirm details in the Times’ article.The LAPD and the FBI are conducting a joint investigation, the LAPD spokesperson said. The FBI and GardaWorld were not immediately available for comment.

GardaWorld says on its website that it is a “long-standing security partner of choice to some of the most prominent brands, Fortune 500 corporations and governments.” Its mission is to protect its clients’ assets and operations.The company has 425 branch offices across 45 countries, according to its website.  An employee at GardaWorld told NBC Los Angeles “the place is pretty secure.”

“They check that the alarm is set up, so, just to think that they were able to go through the security system and get away with all that money, it’s a shocker,” said the employee, who asked to remain anonymous.The alleged heist is said to be one of the largest in Southern California and comes two years after the multimillion-dollar theft of jewelry and gemstones from a Brink’s tractor-trailer while the driver was inside asleep. A second driver was away from the vehicle for nearly 30 minutes getting food inside a rest stop. Some have said thieves took 22 bags worth less than $10 million while others believe it was roughly $100 million. No arrests have been made.  On Sept. 12, 1997, $18.9 million was stolen from the former site of the Dunbar Armored facility on Mateo Street in Los Angeles. The robbers were eventually caught, the Los Angeles Times reported.

10. Prof G Blog