Equity Return Forecast drops to 3.2%
Psychology improves, but not much.
Rate cut growing more likely by end of summer.
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World Wrap
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Market Outlook – Beyond Meat Peak Sentiment
No movement in the market risk index over the last week.
Investor psychology shows few signs of short-term improvement.
World Wrap
Markets were able to close the week modestly higher after a strong Friday jobs report which included a 49yr record low unemployment rate of 3.6%
Healthcare has been staging a bounce back, with all its 4.8% ytd gains coming in the last two wks. The sector has become a 2020 election poll.
In a familiar tactic of Trump’s to use economic strength as political capital in trade negotiations, tariffs on $200b of Chinese goods to increase to 25% on Friday.
Commodities have been slipping since peaking nearly a month ago. The economic bellwether, Dr. Copper, has been sliding, contradicting recent positive economic news.
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Market Risk Index
Market Risk Index scales from 0 to 100%. Higher readings correspond with higher risk markets. Scores below 25% are bullish. Scores between 25-75% are neutral, and scores above 75% are markets vulnerable to major drawdowns.
Model Category Readings (Percentiles)
- Psychology 99.7%
- Monetary 87.2%
- Valuation 99.3%
- Market Trend 9.8%