Fundamentally speaking, US growth is slowing. Technically the markets are consolidating. After a steady rise from early-October through mid-January, DJIA, S&P 500 and NASDAQ appear to be taking a breather. Monetary policy remains loose, interest rates are low and are likely to remain low. QE4 or repo market support is now expected to continue through at least April 2020. February is seasonally neutral for markets, and investor sentiment is fading. Any pause in market trends is likely short-lived.
There are several market tendencies or historical biases that we highlight throughout the year. One historical tendency worth noting at this time of year is the “January Effect.” The “January Effect” refers to the tendency of small cap stocks (as a group) to outperform their large cap counterparts early in the calendar year.
Markets are up strongly since we turned bullish. We expect that momentum to continue after a mild pullback. Overbought signals are here.
Working with our US interns in Moscow has always been exciting and inspiring. Over the last 20 years, AVC Advisory has hosted more than 40 interns with many becoming life-long friends. This year we are happy to have Kathe Erichsen work with us. Besides doing tremendous research into the new laws requiring Swiss Banks to Read more ➝
Reading this week’s commentary from Joseph Quinlan, Head of CIO Market Strategy at JP Morgan seems more like a preliminary celebration of International Women’s Day than a market commentary. Basically, Mr. Quinlan’s bull case rests on women’s adoption of the mobile phone! Just read the concluding paragraphs from his fairy tale: “… the steady advancement of women, Read more ➝
Merrill Lynch’s CIO sees a positive US market environment underpinned by better valuations and loose monetary policy. Although political global uncertainty and potential volatility continue, a positive shift in the markets is underway. We would say that ML is looking in hindsight, and could miss the fact that February is usually the weakest of the Read more ➝