November Trend Report

Clint Sorenson, CFA, CMT WealthShield

The Good...

Economic growth remains in a positive trend.
Global stock markets are the strongest asset classes we track.
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...

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.
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?...

Consider moving a portion of portfolio assets to a defensive posture (the worst case is that you buy back in at higher levels).
Look at asset classes that are typically negatively correlated with stocks during down markets (i.e. Managed Futures).
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

Author

Clint Sorenson, CFA, CMT

WealthShield

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.