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World Wrap

World Wrap

– Global equities and fixed income are starting 2025 with a decline, while commodities are up sharply in higher oil prices.
– In a mainly down week for sectors, styles, and factors – Energy, Healthcare, and Materials stocks climbed.
– International equities outperformed US stocks last week. Still, over 60% of countries have officially entered correction territory.
– Commodities have started the year with a strong start – crude oil is up nearly 7% ytd. Treasuries have continued to sell off, and the 30Yr is flirting with 5% yields.

Q4 2024 World Wrap

Q4 2024 World Wrap

– 2024 was another dominant year for U.S. equities, climbing more than 25%. The average asset class performance, excluding U.S. stocks, was between 6% and 7%.
– Diverging outcomes emerged among styles and factors, with most of the spoils favoring growth and large-cap stocks. The cap-weighted S&P 500 outperformed the average stock over the last two years by the widest margin since 1999.
– International equities lagged U.S. stocks, failing to generate double-digit returns. Developed markets underperformed U.S. Treasury bills. Argentina was a notable exception, with its stock market doubling due to President Milei’s reforms.
– Long-term Treasury yields finished the year at their highest levels, defying the typical script for how bonds react to Fed rate cuts. The dollar closed out the year at two-year highs.

World Wrap

World Wrap

– Global financial assets rallied during the third quarter, with real estate and international equities leading the way. Commodities declined on lower oil prices.
– Q3 was good for unloved areas of the mkt. Small caps and value stocks outperformed. Utilities rallied 19.4% to become 2024’s best-performing sector.
– Emerging markets outperformed on strength from China. Its equity market climbed almost 24%, with most gains made in the last week of the quarter.
– Gold prices bounced 12.9%, continuing a steady pace of new all-time highs throughout the quarter.

World Wrap

World Wrap

– Fed chairman Powell’s more hawkish tone led to broad declines across global equities and fixed income.
– There were no safe havens, with all styles, sectors, and factors declining. Small stocks and value stocks suffered the largest declines.
– More than 90% of countries declined last week. Israel was an exception, advancing more than 2.5%. Israel is one of the best performing countries in 2024.
– Treasuries sold off, sending yields to post-election highs. The US Dollar climbed to a fresh 2-year high.

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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%

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