– Market Risk Index rises on deterioration in psychology and valuation
– Daily psychology readings have rolled over, increasing the odds that the first bear market rally has ended.
– Boomers are bearish, and Millennials are bullish.
– Valuations are pushing a new paradigm within such a severe recession.
– Really unusual speculative sentiment and performance divergences are occurring within the recession.
– US Equities and commodities rallied. Commodities led all assets classes for the week on a snap back in oil prices.
– NASDAQ and Tech leadership continues. The five FAAAM stocks comprise nearly 40% of the NASDAQ, and two stocks make up 42% of Tech.
– Global cap-weighted equities went higher, but the average country declined last week. Median ytd country return is -24.6%
– Crude oil edged out Bitcoin to lead commodities for the week. Unemployment rate jumped to 14.7% – the worst since the Great Depression.
– Market Risk Index edges higher but still neutral, as enough of the wall of worry remains intact.
– Banks tighten lending standards like its 2008.
– NASDAQ to NYSE volume indicator surges to 25yr highs on FAAAM stock strength.
– AAII Bearishness sees a surprise increase.
– Able to make Great Depression and Dot-Com bubble comparisons at the same time…this might be the most unusual stock market that we have ever witnessed.
– A mixed week with International equities, commodities, and real estate moving higher, as US stocks and Treasuries declined slightly.
– This year’s underperforming sectors and styles, like Value and Energy, rallied during the week, while 2020’s leaders underperformed or declined.
– Emerging market stocks rallied more than 4%, and the median country climbed 4.6%. Only two countries stock markets declined last week – the US and Vietnam.
– Treasury yields climbed, and Bitcoin staged a 17.9% rally, with a one week move that accounts for almost all of its ytd gains.
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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)
