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World Wrap

World Wrap

– US Equities declined for the 4th week in a row on more US-China trade drama. International equities bucked that trend and managed to climb modestly for the week.
– Energy sector dropped 1.9% and now in negative territory ytd. Tech leading all sectors ytd, but Utilities & Staples outperforming all sectors over the last 1yr substantially.
– Wk in trade: China announces tariffs – Trump threatens to force US cos to stop doing biz w China. Trump says China wants to restart talks – China disputes it.
– The message coming from central bankers in Jackson Hole last week was that central banks cannot solve all the world’s problems.

World Wrap

World Wrap

– Equities have fallen and bond prices have risen for three straight weeks. REITs claim top ytd asset class, buoyed by falling yields.
– Energy stocks lost over 3% last week, and the sector is now the worst performing sector ytd, up a little over 1% for the year.
– Expectations growing that Fed chair Powell will use Jackson Hole meeting this week to affirm market expectations for a 25bps cut in September.
– Longer maturity Treasuries were up over 4% last week and up over 20% ytd, beating US equity performance.

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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% 99.7%
  • Monetary 87.2% 87.2%
  • Valuation 99.3% 99.3%
  • Market Trend 9.8% 9.8%