November Trend Report
|The Good...
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Economic growth remains in a positive trend.
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Global stock markets are the strongest asset classes we track.
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Inflation is muted and defensive asset classes continue to weaken.
The Bad...
- The growth in the ECRI weekly leading index peaked in 2017 and has since declined.
The Ugly...
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Transports and small capitalization stocks are weak relative to the broad equity market. The market has bad breadth! Market internals areweakening even as the broad market indices reach new highs.
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Credit markets suggest that market volatility should increase from here as high-yield spreads have recently crossed above the 200 day moving average.
What Should We Do?...
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Consider moving a portion of portfolio assets to a defensive posture (the worst case is that you buy back in at higher levels).
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Look at asset classes that are typically negatively correlated with stocks during down markets (i.e. Managed Futures).
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Do not buy and hold. This may be one of the worst periods ever to buy and hold the overall US stock market.
Download The Full November Trend Report
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