Summary

Equity markets returned to a positive tone, but are looking at very modest gains from a month ago. SPX up 3.2%, IWM up 6.9%, NDX up 4.5%. All sectors, with the exception of energy, were up today.

Bonds were down a bit: 10 year govts. were up very modestly (0.2%, but a percentage change in a yield doesn’t communicate much). The US 10 year yield is now at 0.741%, which while low is materially up on the 0.67% a week or so ago. Broader equity markets are generally up, but most commodities down.

Ideas

Goldman Sachs is advocating a change to value reported here. One way to implement this would be to go long $IWN vs $VONG, factor ETFs for value and growth respectively, from Russell 2000 universe. Unicorn Bay thinks that IWN has a beta of ~0.77, whereas VONG has one of approx 0.95. For rough market neutrality, you’d need to buy approx 5 IWN for for every 4 VONG. This is not investment advice, and this would remain a very risky pair position and in any case it’s a widely held view that Goldman puts out a strategy like this in the public domain when they want to close out their own positions. You have been warned! You can use the beta calculator tool here. I suggest you use SPY as the market index.