The global equity market continued its upward trend in Q2, albeit at a subdued pace versus Q1. Global stocks are up +11.5% year-to-date as of Q2 end (represented by ACWI below), with U.S. big tech still leading the way. Gold held onto its gains, up +12.9% through Q2, while the bond market remained a laggard. … Continue reading Q3 2024 Update
People who spend enough time in and around the financial markets learn important (and often painful) lessons. One is that market history doesn't necessarily repeat itself, but rhymes a lot! Something that sounds familiar right now is the frenzy surrounding Artificial Intelligence (AI). Investors are all aboard the hype train. Just look at the AI … Continue reading Rhymes and Reasons
I wrote in March that U.S. economic and market conditions continued to improve in 2024 which was positive for risk assets. As though right on cue, the global equity markets began a month-long downturn in April. Clearly, market timing is not a forte of mine, nor has it ever been! To be fair, I also … Continue reading Bad News Good News
The global equity market advanced another +9% in Q1 2024 (represented by ACWI below). U.S. stocks led the way, again. The U.S. bond market (AGG) prices fell -2% over the same period. Gold prices (GLD) moved sideways for much of the quarter but jumped almost +10% in February. The biggest headline in Q1 was Bitcoin … Continue reading Q2 2024 Update
Last November, I wrote The Trend is Your Friend. The post summarized improvements observed in various economic and market data and also discussed the age-old market wisdom to not fight a prevailing trend. Based on what we saw, conditions supported increasing risk exposure. That move worked in our favor because markets continued their upward trend. … Continue reading Still Friends
"The trend is your friend" is an old market adage known by traders old and new alike. Other sayings like "take what the market gives you" and "don't fight the tape" share a similar underlying principle that forms the basis for investing approaches like "momentum" and "trend-following" strategies. The principal is simple, markets typically move … Continue reading When Trend is Your Friend
Market divergence I've written a few times about the divergence in equity markets this year, and that divergence continues. In the U.S. the S&P 500 gave back a chunk of its YTD gains since July but is still up +9.35% as of October 31st. Meanwhile, an equal weight index of the S&P 500 has turned … Continue reading Divergence Continues
Last month I wrote about changes in economic conditions in 2023. The changes continue but we are seeing more dispersion. One surprise in 2023 was in U.S. housing. Despite widespread forecasts of doom and gloom, housing started the year with months of sudden and unexpected gains. Just as people were rationalizing those gains, single-family home … Continue reading What Changes May Come
Uncertainty loves complexity Uncertainty remains high with respect to the economy and the markets. On the one hand, we have a steeply inverted yield curve and a deteriorating housing market. But on the other, we have improving sentiment and a strong jobs market. The truth is nobody really knows what happens next and we can … Continue reading KISSing with Stocks
An excerpt from my latest article at seekingalpha.com. After a challenging 2022, global financial markets have gotten off to a strong start in 2023. That has many investors hoping, calling, and fishing for a bottom to the bear market in stocks. Anything is possible in the near term, but whether 2023 marks the start of … Continue reading Bottom Fishing
OVERVIEW The third quarter began with a broad rebound in risk assets. The global equity market regained +13% from its June lows by mid-August. However, sentiment turned again and markets have been volatile since. Year-to-date the global stock market is down near-26%. Emerging markets fared worse, down close to -28%. The losses are broad even … Continue reading Q4 2022 Update
MARKET OVERVIEW The global sell-off in financial markets accelerated during Q2. Global equities officially entered a bear market, breaching the technical definition of a -20% decline. US stocks were down most, but all major equity regions were down double digits year-to-date. Even the US bond market was off by -10% for the year. Figure 1: … Continue reading Q3 2022 Update
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