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View from Toronto: Global Risk Assessment This Week

08/08/2018 4:05 pm EST

Focus: MARKETS

Ziad Jasani

Managing Director and Partner, Independent Investor Institute

Currently, higher-risk assets  present on the cheaper side of annual routines while defensive sectors have enjoyed a temporary flattening of yields, writes Ziad Jasani Monday from Toronto.

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Global Risk Sentiment

Looking at the third column to the right we see a comparison of higher risk asset classes and defensive asset classes back to the S&P 500 (SPY) on an annual basis.

Comparison to the S&P 500 creates a “risk-ladder” where market risk is considered neutral.

chart 1

When we see more green above the SPY-line (middle line) and more red below we have a general “risk-on” signal; and vice-versa - red above, green below would be “risk-off.”

Currently, higher-risk asset classes are generally on the cheaper side of annual routines.

Defensive asset classes have enjoyed a temporary flattening of yields, and currently present as mostly neutral.

This allows for indecision to risk-on to present this week for Equities.

For the Global Equity Market to rise, U.S. Treasury yields must rise, but the USD must remain flat allowing the World-Ex-US, trade war related spaces and Commodities to do the heavy-lifting alongside Technology.

Join Ziad at MoneyShow Toronto Sept. 15 when he discusses Portfolio Management Strategies for Active Investors. Information: ZiadJasani.TorontoMoneyShow.com

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