– Risk assets declined, except for commodities, which climbed on higher oil prices. Strength last week was largely confined to sectors and countries tied to oil prices.
– It was a challenging week for growth and momentum stocks. The darling of 2020, Large Cap Growth, was down year to date through Friday’s close.
– Emerging market stocks were hit hard, down more than 6%, as Chinese equities declined almost 10%.
– Fixed income sectors are all negative ytd, with one exception, high yield. Junk bonds held onto a positive return.
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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%