Epsilon Theory Professional

In The Flow

You need to be signed-in as a Paid subscriber to view this. Find out more here!

You need to be signed-in as a Paid subscriber to view this. Find out more here!

Hello! The page below is a preview of Epsilon Theory content that is only accessible to Epsilon Theory Professional subscribers. To learn more about this content and how to subscribe, please click HERE.

In the Flow – You Are Here, May 2019

May 13, 2019

Each month we update our five narrative Monitors and summarize the main findings from each.

The big reveal for May? There’s a tremendous amount of narrative complacency out there, particularly on Trade and Tariffs, which means this market has a long way down if the narrative focuses on negotiation failure. It’s not focusing there yet, but that’s what you want to watch for.

Read more

In the Flow – Wage Growth, Groucho Marx Edition

May 6, 2019

Wage stagnation in 2016 was actually much worse than you were told. Did this make a difference in the Midwestern states that swung the election, in that actual labor conditions were worse than everyone thought they were? I think yes.

Wage growth in 2018 was actually much better than you were told. Did this make a difference in the current Fed/Wall Street/White House narrative that inflation is dead and the easy money punchbowl can be maintained without consequence? I think yes.

Read more

In the Flow – It’s Toasted

April 30, 2019

When Donald Trump tells you that there’s no inflation, that up is down and black is white, that monetary policy … It’s toasted! … you’ve gotta believe him, right? Right?

Actually, for investment purposes, you do. When everyone knows that everyone knows that inflation is dead, that IS the common knowledge. And the common knowledge must be respected.

Read more

Narrative Monitors

ET Pro Inflation Monitor

Weimar

We track the prevalence and attention of inflation topics in financial and broadly circulated news sources, including their attachment to narratives around financial markets.

Updated through April 30, 2019. Updated monthly.

ET Central Bank Omnipotence Monitor

Central Bank Omnipotence

We track the prevalence and attention of credibility attached by a wide variety of news sources to central banks and their influence on participants in financial markets.

Updated through April 30, 2019. Updated monthly.

ET Trade and Tariffs Monitor

Trade

We track the attention paid to and sentiment of a various trade and tariff-related topics in a range of news sources, especially with respect to their attachment to financial market narratives.

Updated through April 30, 2019. Updated monthly.

ET US Fiscal Policy Monitor

Fiscal Policy

We track the strength and consistency of narratives about US fiscal policy, including budgets, tax policy and debt.

Updated through April 30, 2019. Updated monthly.

ET Credit Cycle Monitor

Knights Templar Bank

We track the strength of narratives about the credit cycle in general, plus lending, liquidity and other trends in credit markets.

Updated through April 30, 2019. Updated monthly.

In Focus

ET In Focus reports are single-issue topical analyses. They cover investment and portfolio construction topics, issues relating to the businesses of investment management and wealth management, and narrow analyses of the narrative structure and trends on specific issues, companies, sectors, countries or financial markets.

Getting Defensive

January 27, 2019

With aerospace and defense in the spotlight, we turn our own spotlight to the sector. We find a generally weak narrative structure with a lot of vulnerability to positive and negative events. We also find some interesting shift in project-specific narratives for Lockheed Martin (LMT).

Read more

A Tale of Two Tales (Banking)

January 13, 2019

US Banks have a common narrative structure – two competing topics of vastly different sentiment, with one dominating market attention at any given time. Worthy of some thought going into bank earnings week.

Read more

Multiple Ways to Lose (AAPL)

January 3, 2019

We examine how Apple found both of the ways to lose on narrative in less than two months’ time, and outline how that might change the playbook for the near-, medium- and long-term for different investor types.

Read more