Cross-Asset Strategist & Quantitative Analyst, Pennock Idea Hub

Cam Hui

Cross-Asset Strategist & Quantitative Analyst

Pennock Idea Hub

We are creators of independent equity research. The Pennock Idea Hub team are veterans of the investment industry. Much of our team has spent their careers at Merrill Lynch, Deutsche Bank, RBC Capital Markets and Wood Gundy. We have taken every aspect of research back to the studs and returned to first principles. The Pennock Idea Hub marries the interests of the sell and buy side. 

We offer the best research for institutional investors by:

-Only publishing research from veteran analysts
-Eliminate the inherent conflicts of the traditional sell and buy side relationship
-Ensure our team is always accessible; collaboration with clients nurtures our collective success

Cross-Asset & Quantitative Research

Technical Analysis

Energy Select Sector SPDR Fund / Technical Analysis

Historically, The Economist magazine covers have been excellent contrarian market signals (see <a href="https://www.smartkarma.com/insights/poised-for-a-bond-market-rally" target="_blank" rel="noopener">Poised for A Bond Market Rally</a>). The Economist may have done it again this week with a focus on the global warming effects of heat waves in North American and floods in Germany.We believe coal and energy equities represent potential contrarian buying opportunities for investors. In addition, the stock market appears to have undergone a bullish reversal off a panic bottom, which should resolve in higher prices in the days and weeks ahead.

Historically, The Economist magazine covers have been excellent contrarian market signals (see Poised for A Bond Market Rally). The Economist may have done it again this week with a focus on the global warming effects of heat waves in North American and floods in Germany.We believe coal and energy equities represent potential contrarian buying opportunities for investors. In addition, the stock market appears to have undergone a bullish reversal off a panic bottom, which should resolve in higher prices in the days and weeks ahead.

Cross Asset Strategy

Despite all of the technical warnings about negative breadth, the S&amp;P 500 has been undergoing a ride along its upper Bollinger Band. While conventional technical analysis would view episodes of negative breadth divergences as bearish, there are good reasons for the bullish resilience of the S&amp;P 500.The top five sectors comprise about 75% of the weight of the index, and their relative performance determines the market’s direction. An analysis of the June relative performance of these sectors shows that three of the five — representing 43.4% of the index weight — are exhibiting positive relative strength. This is in turn putting upward pressure on the index.The stock market is also underlying an internal rotation between value and growth. Ed Clissold of Ned Davis Research wrote, “The back-and-forth leadership is the reason market breadth has been so resilient.”In the short run, count on more back-and-forth value and growth rotation that supports stock prices. History shows that the DJIA seasonal pattern in July is bullish. Enjoy.

Despite all of the technical warnings about negative breadth, the S&amp;P 500 has been undergoing a ride along its upper Bollinger Band. While conventional technical analysis would view episodes of negative breadth divergences as bearish, there are good reasons for the bullish resilience of the S&amp;P 500.The top five sectors comprise about 75% of the weight of the index, and their relative performance determines the market’s direction. An analysis of the June relative performance of these sectors shows that three of the five — representing 43.4% of the index weight — are exhibiting positive relative strength. This is in turn putting upward pressure on the index.The stock market is also underlying an internal rotation between value and growth. Ed Clissold of Ned Davis Research wrote, “The back-and-forth leadership is the reason market breadth has been so resilient.”In the short run, count on more back-and-forth value and growth rotation that supports stock prices. History shows that the DJIA seasonal pattern in July is bullish. Enjoy.

Managing Director

Elan Gore

TMI Data Science

TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade & traditional media.  Our proprietary software, TMI Machine, is a text-mining platform designed with the buy-side & capital markets professional in mind, text-mining the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income & individual equities.  TMI provides custom leading indicators and systematic trading strategies, operating at the nexus of linguistics & statistics drawing on vast experience in investment banking and hedge fund settings in senior quantitative and fundamental roles.  

TMI Data Science was founded by Elan Gore, an award-winning Senior Global Basic Materials Equity Analyst & China Economist with 15 years of experience in North American hedge funds & institutional managers; and Alessandro Porrino, Ph.D., an Algorithmic Trading Analyst and Programmer with 10 years of front-office experience ranging from complex FX option pricing to auto-hedging strategies at Bank of America Merrill Lynch and Standard Chartered.  Mr. Gore holds an MBA in Finance from New York University Stern School of Business, and Mr. Porrino holds a Ph.D. in Systems Engineering from Brunel University London.

<ul>
<li>We trace the recent media preoccupation with asset bubbles to find that fears over potential bubbles in SPACs, Clean Energy, IPOs and Bitcoin have clearly lost momentum in recent weeks</li>
<li>Talk of a "commodities supercycle" has surged to a new high, coinciding with the current wave of weather-induced energy disruptions</li>
<li>Vaccine rollout sentiment has been consistently improving for weeks, as data from France and Germany has improved slightly in the MTD while the US rollout continues to accelerate</li>
</ul><div class="content-highlight">TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. </div>


We trace the recent media preoccupation with asset bubbles to find that fears over potential bubbles in SPACs, Clean Energy, IPOs and Bitcoin have clearly lost momentum in recent weeks
Talk of a "commodities supercycle" has surged to a new high, coinciding with the current wave of weather-induced energy disruptions
Vaccine rollout sentiment has been consistently improving for weeks, as data from France and Germany has improved slightly in the MTD while the US rollout continues to accelerate
TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. 

TMI Snapshot: Bubble Fears Subside, Commodity Supercycle Views Spike, Vaccine Sentiment Rises

Quantitative Analysis

The global economy is poised for a bull market in commodity prices. Within the commodity-producing sectors, there is a substantial value opportunity for investors in energy stocks owing to the reluctance of management to invest in new supply should oil prices rise.The cyclical rebound should translate into higher oil prices over the next 12–24 months. In the past three years, the ratio of energy stock prices to crude oil has been relatively flat. Energy stocks should rise in line with oil prices, which creates considerable profit potential under a bullish oil scenario.

The global economy is poised for a bull market in commodity prices. Within the commodity-producing sectors, there is a substantial value opportunity for investors in energy stocks owing to the reluctance of management to invest in new supply should oil prices rise.The cyclical rebound should translate into higher oil prices over the next 12–24 months. In the past three years, the ratio of energy stock prices to crude oil has been relatively flat. Energy stocks should rise in line with oil prices, which creates considerable profit potential under a bullish oil scenario.

Value Opportunities in the New Commodity Supercycle

<ul>
<li>After a tumultuous January, it's easy to forget the original negative reaction to Biden's January 14 unveiling of the $1.9tr USD stimulus plan on concerns over ambitious wealth redistribution policies</li>
<li>Our text-mining finds that sentiment on the stimulus package has surged to &gt; +2x STDEVs in recent days, driving the revival of cyclicals sentiment and the value-over-growth theme after a short pause</li>
<li>With Biden's $15/hr minimum wage proposal likely off the table at this stage, at least one potential source of worry has been removed for corporate America</li>
<li>In conjunction with the surge in sentiment, we see a record volume surge in coverage of infrastructure and clean energy themes ahead of Biden's much-anticipated additional $2tr stimulus bill expected later this month focusing on the long-term "Build Back Better" campaign theme of sustainable infrastructure and decarbonization investment</li>
<li>Despite disappointing non-farm payrolls, new alt-data points in the past week highlight a late-January surge in US job postings; in light of the crude oil recovery and deceleration in new COVID case growth, recent data points confirm the rotation trade had only paused momentarily in January</li>
</ul><div class="content-highlight">TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. </div>


After a tumultuous January, it's easy to forget the original negative reaction to Biden's January 14 unveiling of the $1.9tr USD stimulus plan on concerns over ambitious wealth redistribution policies
Our text-mining finds that sentiment on the stimulus package has surged to &gt; +2x STDEVs in recent days, driving the revival of cyclicals sentiment and the value-over-growth theme after a short pause
With Biden's $15/hr minimum wage proposal likely off the table at this stage, at least one potential source of worry has been removed for corporate America
In conjunction with the surge in sentiment, we see a record volume surge in coverage of infrastructure and clean energy themes ahead of Biden's much-anticipated additional $2tr stimulus bill expected later this month focusing on the long-term "Build Back Better" campaign theme of sustainable infrastructure and decarbonization investment
Despite disappointing non-farm payrolls, new alt-data points in the past week highlight a late-January surge in US job postings; in light of the crude oil recovery and deceleration in new COVID case growth, recent data points confirm the rotation trade had only paused momentarily in January
TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. 

TMI Snapshot:  Sentiment Surge on Biden Stimulus - What a Difference 3 Weeks Make

United States

Energy Select Sector SPDR Fund is an exchange-traded fund incorporated in the USA.  The ETF tracks the performance of the Energy Select Sector Index.  The ETF holds large-cap U.S. energy stocks. It invests in companies that  develop & produce crude oil & natural gas, provide drilling and other energy related services. The holdings are weighted by market capitalization.

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Energy Select Sector SPDR Fund (XLE US)

Another Magazine Cover Buy Signal?

We believe coal and energy equities represent potential contrarian buying opportunities . As well, the stock market appears to have undergone a...

Cam Hui

The Resilient S&P 500

While conventional technical analysis would view recent episodes of negative breadth divergences as bearish, there are good reasons for the bullish...

Cam Hui

TMI Snapshot: Bubble Fears Subside, Commodity Supercycle Views Spike, Vaccine Sentiment Rises

Increased complacency has been apparent in recent weeks as bubble fears subsided on key themes thought to be potentially overextended. At the same...

Elan Gore

Value Opportunities in the New Commodity Supercycle

The global economy is poised for a bull market in commodity prices. There is a value opportunity for investors in energy stocks owing to the likely...

Cam Hui

TMI Snapshot: Sentiment Surge on Biden Stimulus - What a Difference 3 Weeks Make

We have seen a +2x STDEV surge in sentiment on Biden's stimulus package and a record increase in coverage of infrastructure and clean energy...

Elan Gore

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