Insights
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Cash Is King
Two weeks ago we outlined the case for a continued bull market in equities after a blistering start to the year. While this week’s pullback may simply be a case of the market needing a breather after such a strong start, there are other indicators that point to potential short-term weakness as well.
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Keeping Nimble
As we close out the month of July, the S&P 500 is fast approaching a new all-time high, now trading less than 5% away from its previous high, as of the market close on Wednesday. Up until recently, the 2023 equity market rally has been defined by strong gains from 7 mega-cap stocks, with the rest of the market treading water.
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Preparing to Pass the Disinflationary Peak
On Wednesday it was reported that inflation (CPI) fell to its lowest annual rate in more than two years during June, increasing 3% from a year ago, the lowest level since March 2021. On a monthly basis (MoM), the index, which measures a broad swath of prices for goods and services, rose 0.2%.
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Nothing To Fear?
In February, we discussed how the rise of zero days to expiration (0DTE) options may impact the dependability of the Cboe Volatility Index (VIX), which is commonly regarded as a proxy to gauge market volatility and investors’ views on volatility.
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The Impacts Of Tightened Bank Lending
The high yield bond asset class has been trading in a tight range dating back to July 2022, with virtually all of its performance stemming from yield, rather than price appreciation (below). This tight trading range is uncommon and suggests a potential breakout coming, one direction or another.
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Implications of the Debt Limit Deal
With Congress voting to support the recently agreed-upon debt limit bill, the threat of a US default has been averted. However, it is crucial to address the implications of this deal and examine how it may impact markets and the economy in the short and long term.
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The Consumer Debt Bubble
Recent news coverage has primarily focused on the US Debt Ceiling Crisis and, to a lesser extent, potential warning signs in commercial debt. However, there is another looming debt crisis that has received little attention so far: Consumer Debt.
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On Stable Ground?
In our March 16, 2023 Market Insights piece we discussed the possibility of contagion in the banking sector in the wake of the Silicon Valley Bank collapse.
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The Impact Of Stagflation
Federal Reserve Chairman Powell announced on Wednesday that the Federal Open Market Committee (“FOMC”) would raise the Effective Federal Funds Rate 25bps to a target rate of 5.00-5.25% with a forecast to hold rates at this level through the remainder of the year.
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Kensington Brief: Managed Income – Diversifying the Core
In February 2023 we laid out the case for Dynamic Growth as a core equity allocation predicated on how incorporating investments with low correlation to the market (and each other) may benefit portfolio performance and provide true portfolio diversification.
