Are Markets “Getting Ahead of Themselves”?
For about 6 weeks the market has moved higher. This momentum takes many indicators to extremely overbought levels. This typically leads to weak price action going forward.
May is Worse
May shows poor performance in mid term election years, especially in the mid part of the month.
April Powers
April is historically a great month for stocks. However, in mid-term election years like 2022, its just mediocre.
Friday Investment Talk: Bonds Weakness and Equity Strength
Bonds are now worst performers than stocks since the beginning of the year. Such pessimism in bond prices has not been seen for decades. Meanwhile, interest rate hikes are usually bullish for equities during the first few months of increases. Value stocks broke out to new highs this week as market internals turn more bullish. Read more ➝
Friday Investment Talk: Markets Rebound
Markets staged a massive rebound this week, led by some of the worst performing stocks including Chinese and tech names. Investors took their lead from the US Federal Reserves hawkish comments supporting sustained interest rate hikes to control inflation while not reducing GDP growth expectations. Buy signals sprouted across many indicators. Put/Call Ratios are rolling Read more ➝
Friday Investment Talk: Bond Yields, AVC Investment Strategy, Recession
Bond Yields are nearing 2% in US and Italy. This has killed the long term Austrian bond we love to look at. Investing in energy, precious metals and defense contractors has paid off since the start of the year. Our strategies show strong outperformance compared to the $SPX. Recession is predicted by the S&P 500 Read more ➝
More Volatility in February
While the fundamental economic outlook remains positive for US markets, inflation and high stock multiples are wearing on investor sentiment. February could offer a reprieve for the market in the volatile mid-term election year.
Biotech – Analysis and Outlook
AVC have focused on the two leading Biotech ETFs over the last few years, but it has been a tough year. We follow XBI and IBB. XBI is SPDR S&P Biotech, and IBB is iShares Biotechnology.
January Market Expectations
Mid-Term Januarys usually provide less than optimal market conditions for investors. They also are less prescriptive of the rest of the year’s returns.
Flattened Alibaba
Analysts have a neutral view of Alibaba (BABA) going into 2022. They see revenue across all business lines slowing from pandemic levels. But growth rates are still strong, and new business lines are just in their infancy. The negativity among analysts is palatable. Longer term, they maybe overdone.