– Global stocks rallied – bonds and REITs sold off. US equities take the lead among asset classes.
– Over the last 3 mos, value stocks staging comeback, outperforming growth across mkt cap spectrum. Utilities sold off more than 3.5% as bond yields climbed.
– Emerging markets outperformed last week. US Dollar starting to weaken against Chinese Renminbi as optimism around Phase 1 deal builds.
– Bonds sold off nearly across the board, with the exception of US high yield. US Bond market has stopped pricing in add’l rate cuts.
Archive
Market Outlook – Did your turkey index make a new high?
– Market Risk Index drops but still too elevated.
– Psychology improves on technicals, but offset by enthusiasm from option traders.
– Also…cool charts from Dallas Fed that expound on burgeoning gap between two popular Consumer Confidence surveys.
World Wrap
– All asset classes rallied last week. Most of the gains from equities came on Friday on better than expected payroll numbers from the BLS.
– All large cap style indices broke to new highs last week. Mid-cap stocks are close, but small caps still have some work to do.
– Ten countries joined US equities to make new 52 week highs. Of the 10, only Switzerland made a new all-time high.
– Based on comments from Commerce Secretary, Wilbur Ross, optimism is building that the US-China “phase one” trade deal will happen this month.
Market Outlook – Consumer Confidence in Present Situation Rebounds
– Market Risk Index unchanged – Changes in psychology and Monetary moves offset.
– Consumer Confidence in present situation rebounds to move closer to cycle highs and still too close for comfort to 50yr highs.
– It’s a momentum chaser’s market – but one with more risk than reward.
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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%