Sectors that typically surge toward the end of bull markets are now falling behind. Despite last week’s volatile trading sessions, the primary trend in the U.S. stock market remains upward. This conclusion is supported by the sector relative-strength rankings, despite recent market fluctuations. My optimistic outlook is based on an analysis of sector performance during the final stages of bull markets. However, recent market behavior deviates from historical norms: sectors that usually thrive in the late stages of bull markets are struggling, while traditionally weaker sectors are unexpectedly ..read more

Bob Elliott, CIO of Unlimited Funds, emphasizes the challenge posed by the recent increase in commodity prices for the Federal Reserve. The surge in bond yields this month reflects concerns about sustained inflationary pressures amidst a buoyant economy, marking a significant setback for the ongoing bullish trend in the U.S. stock market. The S&P 500 is currently experiencing its most substantial monthly decline since December 2022, with April’s downturn erasing nearly half of the year’s earlier gains. Despite this setback, the index remains within 5.5% of its record high achieved on March ..read more

This week saw a staggering decline in the market capitalizations of the “Magnificent Seven” stocks, collectively losing $950 billion in market value. Among these, Nvidia took the hardest hit, shedding nearly $300 billion in market cap, surpassing even the entire market value of its rival, Advanced Micro Devices Inc., which stands at $237 billion. Nvidia’s stock plummeted by 13.6% over the week, marking its worst weekly performance since September 2, 2022. Friday witnessed a particularly grim milestone for Nvidia, with a $212 billion loss in market cap, the largest single-day drop in its histor ..read more

The performance of U.S. stocks lately isn’t exactly flattering. Despite starting strong, they consistently close lower, sending concerning signals about the overall market health. Thursday marked the fourth consecutive session where the S&P 500 experienced this reversal trend, the longest such streak in six years, indicating significant underlying issues despite recent rallies. Even amidst Friday’s early downturn in stock index futures following geopolitical tensions between Israel and Iran, there’s a silver lining: the S&P 500 seems poised to open in the red. Nevertheless, the prevail ..read more

In the past week, implied volatility measures for stocks, bonds, and currencies have all surged significantly, marking a notable departure from the prolonged calmness observed in previous months. For instance, the Cboe Volatility Index (VIX), commonly referred to as Wall Street’s “fear gauge,” climbed to 19.56 on Tuesday, reaching its highest level since October 31st, closely approaching its long-term average. Concurrently, volatility indicators tracking options tied to Treasury bonds and major G-10 currencies have also experienced sharp increases. The ICE BofAML MOVE Index, which gauges impl ..read more

According to strategists and fund managers, markets are shifting their dependence away from Fed rate cuts and focusing more on corporate earnings growth. Federal Reserve Chair Jerome Powell’s recent comments about interest rates didn’t cause as much market turbulence as expected. The S&P 500 finished above its session lows, and the Dow Jones Industrial Average ended a six-session losing streak. The slight rise in the yield on the 2-year Treasury note was noted but didn’t cause significant market disruption. Market observers attribute the market’s stability to two main factors: Firstly, o ..read more

In the fast-paced world of trading, conventional indicators often fall short of capturing the nuances of market movements. Traders frequently find themselves grappling with deciphering price action and identifying profitable opportunities amidst the chaos. However, a revolutionary approach combining ABC analysis and the roadmap strategy promises to revolutionize trading dynamics. In this blog post, we’ll explore the intricacies of these innovative techniques and unveil how they can empower traders to navigate the markets confidently and precisely. Understanding ABC Analysis ABC analysis serve ..read more

Next time you’re faced with armed conflict, here’s the savvy approach: In our world, where conflicts and tensions wield significant influence over markets, there’s no shortage of experts offering advice to investors. But heed this: most of them thrive on sensationalism, which may captivate headlines but often spells trouble for investment portfolios. In my book on geopolitics for investors, available for free on the CFA Institute website, I outline a pragmatic guide to navigating such crises. This guide, drawn from extensive empirical research, focuses solely on stock markets‘ response to geo ..read more

On Friday, Treasurys, gold, and the U.S. dollar all experienced increases in value, while there was a surge in demand for investments that protect against stock market losses. News that Israel is preparing for a possible attack from Iran caused investors to seek safer investments on Friday, leading them to sell off stocks and instead invest in Treasury bonds, gold, and the U.S. dollar. The initial cause of the sell-off was a report in the Wall Street Journal stating that Israel was preparing for a potential Iranian attack expected to occur by the end of the week. This situation was reminiscent ..read more

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