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Tag Archives: cash

Asset Allocation Insights – The Seesaw Continues But Risky Assets Continue Winning

Weekly Asset Allocation Highlights

  • Risky assets recovered last week – it seems like every other week we flip around – maybe this week is going to be good for bonds?
  • Developed market equities did best this week with EAFE out-performing the US
  • EM equity and bonds recovered from pretty poor momentum – currency helped last week for a change
  • A 60/40 mix of purely US assets under-performed a global version but remains vastly ahead YTD
  • In general, higher risk multi-asset strategies out-performed last week and remain ahead YTD

Currencies:

  • The USD gave up a bit of ground last week
  • Foreign central banks are reading their way toward policy normalization
  • Within EM currencies the pattern was mixed – the Rand and Rubble recovered nicely but the Brazilian Real continued its downward slide
  • Among the major currencies, the euro outperformed
  • The Yuan has stabilized after a period of depreciation but remains volatile within the “official” range

Commodities:

  • Grains are getting whipsawed by trade war on/off issues – Corn and soybeans continue being most at risk
  • Coffee also keeps getting pounded by the depreciating Brazilian Real
  • Oil is also getting whipsawed by political tensions – up a little last week as curbs on Iranian oil take effect
  • Gold and Silver were stable last week for a change but barring a real crisis continue on a downtrend

This Coming Week:

  • Are political issues in Washington of any concern to markets? Is the Manafort plea deal the beginning of the end?
  • The strong USD keeps crushing investors in international assets but should be losing some momentum.
  • EM equities, in particular, are taking a huge hit both on the asset side as well as currency -China has a lot to do with this given its weight in the MSCI index (30%)
  • Growth is outperforming Value YTD but things may be turning around especially if interest rates remain range bound
  • Global Tech has performed well this year but short-term it is in a break Down phase. More bad news to come or buy the dip? We are holding steady, not buying more.
  • Gold and Silver are losing their luster – not providing downside hedge and very driven by trends in short-term rates
  • What will make investors price risk more in line with history? A growth scare in the US, maybe? A real inflation scare? Waiting for Impeachment?

To read our full weekly report please click here

Eric J. Weigel

Global Focus Capital LLC

eweigel@gf-cap.com

___________________________________________________________________________________

Publications:

Weekly Asset Allocation Review – Free

Weekly Equity Themes Review – Free

The Equity Observer (Monthly) – Subscription Required

The Asset Allocation Advisor (Monthly) – Subscription Required

 

Asset Allocation Insights – It was a bad week for all of us, Mr. President

Weekly Asset Allocation Highlights

  • President Trump wasn’t the only one having a bad week – is this a Fake Correction?
  • Cash is king once again but our risk aversion index is not picking up any fear
  • US assets lost less last week if that is any consolation
  • International equities lost the most value last week
  • A 60/40 mix of purely US assets out-performed a global version once again
  • Lower risk multi-asset strategies out-performed last week and are ahead in the last month

Currencies:

  • The USD was range bound last week but continues in a technical Up Trend phase
  • Within EM currencies the pattern was mixed
    • The Rand continued depreciating while the Brazilian Real regained some ground versus the USD
  • Within the major currencies, the yen outperformed
  • The Yuan has stabilized after a period of depreciation but remains volatile within the “official” range

Commodities:

  • Grains are getting whipsawed by trade war on/off issues
    • Corn and soybeans continue being most at risk but regained some ground last week while Wheat continues deteriorating
  • Oil is also getting whipsawed by political tensions – down over 3% last week after several up weeks
  • Gold and Silver lost more ground last week and the trend is down especially as ST interest rates keep climbing higher

This Coming Week:

  • Is cash the new King?
    • Bonds and stocks are over-valued but growth still holding up which is positive for stocks but for how long?
    • We still prefer risky assets but are lowering risk at the portfolio level.
  • Are political issues in Washington of any concern to markets? Our risk aversion index is not picking up any concern at the moment.
  • The strong USD keeps crushing investors in international assets but should be losing some momentum.
  • International equities keep losing ground to US stocks despite superior fundamentals – becoming the contrarian play of 2018
  • EM equities, in particular, are taking a huge hit both on the asset side as well as currency
    • China has a lot to do with this given its weight in the MSCI index (30%)
  • Growth is outperforming Value YTD but things may be turning around especially if interest rates remain range bound
  • Global Tech has performed well this year but short-term it is in a break Down phase. More bad news to come or buy the dip? We are holding steady, not buying more.
  • Gold and Silver are losing their luster – not providing downside hedge and very driven by trends in short-term rates
  • What will make investors price risk more in line with history?
    • A growth scare in the US, maybe? A real inflation scare? Waiting for Impeachment?

 

To read our full weekly report please click here

Eric J. Weigel

Global Focus Capital LLC

eweigel@gf-cap.com

___________________________________________________________________________________

Publications:

Weekly Asset Allocation Review – Free

Weekly Equity Themes Review – Free

The Equity Observer (Monthly) – Subscription Required

The Asset Allocation Advisor (Monthly) – Subscription Required

 

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