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
2023 ended up being a great year for the financial markets. Equity markets are up double digits, crypto is again shooting for the moon, and even gold and U.S. bonds are up for the year. But it also proved to be challenging for investors, both novice and professional alike. For example, at the beginning of … Continue reading 100% & 180 Degrees Later
"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
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
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
The NASDAQ is down almost -30% from its November 2021 highs. Unlike the pandemic drawdown, this sell-off doesn't have a clear catalyst. It's unfolding in fits and starts and has investors pointing at a growing list of potential causes - rising rates, a tightening Fed, inflation, slowing growth, high valuations, disappointing guidance, etc. Whatever the … Continue reading A Matter of Perspective
QUARTER IN REVIEW Q1 was a bumpy ride for investors. Global equity market prices (MSCI ACWI) swung from being down almost -13% to only down about -6% for the quarter. However, the negative returns were broad. All major equity regions and even the US bond market were down YTD. Figure 1: Global Markets YTD MACRO … Continue reading Q2 2022 Update
In January, I wrote BCM was entering 2022 with a reduction in our tactical risk allocation, moving to neutral weight from last year's overweight position. That was a fortunate and timely call given the weak start to this year for risk assets. The rationale was the tailwinds that supported equity markets in 2020 and 2021 … Continue reading Are We There Yet?
BCM's latest Investor Letter is available to clients at bellwethercm.com/letters.
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