Weekly Asset Allocation Highlights
- The out-performance of domestic assets continued last week
- A 60/40 mix of purely US assets vastly out-performed a global version
- US large and small cap stocks had an up week but REITS were the standout performer
- REITS have been all year moving along with rates but recently their correlation to equities has increased
- EM stocks continue having a rough year
Currencies:
- The USD keeps chugging along notching small weekly wins
- EM currencies continue their pattern of depreciation
- Among the majors, sterling took the biggest hit despite an increase in ST rates
- The yuan continues depreciating in a controlled fashion
Commodities:
- A week of recovery for grains as President Trump has offered assistance
- Wheat is least affected by global trade fears and has continued on a solid Up Trend
- Gold and Silver continue a downtrend with little sign of relief especially as ST interest rates keep climbing higher
- Lumber prices are breaking down due to over-valuation and a possible dispute with Canada over newly imposed tariffs
This Coming Week:
- Q2 earnings in the US almost done – above average earnings season
- Watching the USD – expecting some depreciation as other central banks start their normalization plans
- Expecting momentum as a factor to start losing effectiveness – last week saw a resurgence of value and yield-oriented strategies
- In the US the key macro number to watch is the CPI – expect a further slow rise
- GDP releases in Japan and England, in China we are expecting Trade Balance numbers as well as CPI
To read our full weekly report please click here
Eric J. Weigel
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