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We are just about halfway through the first quarter of the year and all the major US equity indexes are within reach of their all time highs. The US dollar stalled just where we expected it to and is starting to show some signs of short term weakness. The commentary about there only being a couple of stocks leading the market higher continues despite market breadth expanding and investor sentiment remains remarkably low.....

On January 27, Nvidia fell over 17%, amounting to a $600 billion loss in market cap and resulting in the largest single-day drop in US stock market history according to the CNBC headline on that day. On a day where well over half of US equities were positive, Nvidia and many other AI related stocks were in free fall over fears of a cheap competitor in China....

For the first time since early autumn the equity markets saw a fair bit of turbulence this week. The VIX, or volatility index, surged to 28 Wednesday, nearly doubling by the end of the trading session. This massive spike has been attributed to the announcement of the Federal Reserve’s slightly more hawkish policy plans and resulted in about a 3% drop in the S&P 500. Today we just wanted to share a couple of thoughts about what happens during these types of market events....

One of the most important things we can do as investors is take a step back and ask ourselves one question. What type of market are we in? It is hard to look at what's happening across global markets and be anything but bullish right now. Not only is this the strongest seasonal period for stocks, but just as with last month, more individual investors are bearish than bullish even while indices around the world are breaking out to new 52-week highs....

There was more bullish news out of the US stock market this week when the list of stocks hitting new 52-week highs hit the highest amount since the end of 2021. There remains a bit of weakness in Technology and the Nasdaq has lagged for about a month now. The overall strength of the market has been quite impressive given this relative under-performance in Technology stocks, with Financials, Industrials, and Transports all hitting new monthly closing highs...

As we come to the end of October, the bull market continues to rage on. While technology remains the focus of the media, it has taken the backseat to consumer discretionary, financials, materials and metals with recent performance. This consistent rotation is the lifeblood of a bull market. Even when looking at equally weighted sectors, the leaders continue to break out to new highs on both an absolute and relative basis...

Market Watch Update - Summary: The focus this week has been on the Chinese stock market. After being called “uninvestable” for months and being the darling short trade for fund managers worldwide, Chinese stocks surged over 10% on news of a stimulus package. This massive, short squeeze caused by investors unwinding their heavy short positions had further reaching effects outside of China as well....

All the commotion over the Fed cutting interest rates finally reached a climax last week and equity markets loved it. After a relatively muted reaction immediately following the announcement, Thursday was an explosion of volume, and everything was being bought regardless of sector or trade location. As discussed earlier this month, this is the reaction we were set up for and our portfolio outperformed by a healthy margin into the rally....

Market Watch Update- Sentiment remains strong after a quick decline and almost immediate recovery by the end of the week. Historically, market returns after such a period while being this close to the highs of the year is incredibly strong. Additionally, as of mid-day Friday, 98 large cap stocks were making new 52-week highs, and all 11 sectors were being represented. Further indication of a strong equity market, despite narratives otherwise...

Market Watch Update- Summary: Another volatile start to the month as the S&P 500 falls 4% in the first week. Despite the fear mongering on the financial news, it’s important to remember that it also fell 5% during the first week in August. September is a historically weak seasonal period so the sectors that have been strongest over the last few months softening up a bit to kick it off is nothing out of the ordinary. Zooming out a bit here can tell us a more nuanced story of what’s going on....

The US Dollar (Again) If we sift through all the noise, the mass layoffs in big tech, the influx of mixed earnings calls, or even the endless opinions on what moves The Federal Reserve will take coming into the second quarter of the year; the one indicator that has had any real value over the past year has been the relationship between equities and the US Dollar.....

Market Watch Update- Summary: For the most part, over the last few months the market has been writing the same story it has been all year. The US Dollar is still King and risk assets have continued to struggle while it has remained strong. Energy is still the strongest sector and interest rates are still on the rise. However, alongside these overarching themes, there have been a few emerging trends that appear to be signaling the tides may be shifting.....

The US Dollar With how strong stocks have been over the past few weeks, our focus again is on the US dollar. This time, however, we are looking at how other securities reacted to its mild pullback from former highs. Historically, investors turn to bonds as a flight to safety. Since bonds have been selling off with stocks as interest rates continued to rise since the Summer of 2020, investors instead attempted to de-risked their portfolios by stockpiling their stock sales into the US dollar......

Market Watch Update - Summary: U.S. equities are now just about even with where they were back in the first week of June last year. Although not much has changed with regard to the price of the index, beneath the surface there has been a monumental shift with regards to both sector strength and sentiment. In the early summer of last year momentum stocks, most notably in the technology and communications sectors, were seemingly impenetrable...

Market Watch Update - The US Dollar: The US Dollar may be the most important asset in the world right now. It is currently attempting to breakout over the 2017 highs to a value it hasn’t reached in nearly two decades. Whether the US Dollar sustains this breakout or fails and begins to fall from here has massive implications for what is happening to other risk-assets...

Market Watch Update - The Federal Reserve Raises Rates: With all of this talk about what the Federal Reserve is going to do, it’s important to understand the implications behind their decisions. They are starting a program to hike interest rates in an attempt to lower inflation in a way that doesn’t cause a drastic reaction from the labor market. The rate increase is the sharpest we’ve seen since 2000 and they have noted that additional moves...

Market Watch Update - Summary: After a few more weeks of choppy trading, the fact that we are still in a range-bound market remains abundantly clear. The risk-on and risk-off indicators continue to oscillate aimlessly as equity indexes can’t seem to decide on a direction for more than a day or two. However, there are a few clearly defined trends that we can use to navigate an otherwise difficult market...

Market Watch Update - Summary: What is the yield curve and why is everyone suddenly talking about a recession? Was that it for the rally we saw at the end of March? Inverted Yield Curve The overwhelming majority of noise in financial markets this past week has revolved around the inverting of the yield curve. More specifically, the 2-year U.S. Treasury Note briefly rose above the 10-year U.S. Treasury Note for the first time since September 2019. Even though this has been...

Market Watch Update - The Inflation Trade: Whether we are looking at domestic stocks, bonds, commodities, or foreign markets, one thing remains clear: the inflation trade is still working. The S&P 500 made new multi-year lows against commodities on Friday while the US 10 Year Treasury rate made new multi-year highs. Everywhere we look in the market, assets that tend to do well in higher interest rate environments...

Market Watch Update - US Market Outlook: We are currently experiencing one of the worst starts of the year in history for US stocks, particularly within growth sectors. When we zoom out, however, we can see that we are really just stuck in a large trading range as there has been no upward progress in the major US indices for 9 months. This type of consolidation is consistent with this being the second year after what we believe to be a new bull market which began...