Title: Market Analysis: Bullish Bets Still Strong Despite Recent Volatility
In recent weeks, the financial markets have experienced some turbulence, but the trend data shows that there is still room for optimism when it comes to maintaining bullish positions. The latest numbers from a set of ETFs reveal that most assets in 2024 are still posting gains, even through Friday’s close (Aug. 9).
The US stock market is leading the pack in terms of year-to-date results, with the S&P 500 up nearly 13%. Following closely behind are commodities, stocks in emerging markets, and US real estate. On the other hand, inflation-indexed government bonds ex-US are the worst performer so far this year, with a 3.3% loss.
Overall, a globally diversified portfolio is still performing well in 2024. The Global Market Index (GMI) has seen a 9.2% increase year to date, which is quite impressive given the recent market volatility. The GMI, an unmanaged benchmark that represents all major asset classes (excluding cash) in market-value weights via ETFs, serves as a competitive benchmark for multi-asset-class portfolios.
Despite the recent correction in the market, it may be premature to declare the end of the bull run, especially when looking at US equities. The market has experienced a slight dip from its record high in mid-July, but the correction is currently within the realm of normal fluctuations. Additionally, the S&P’s 50-day average remains well above its 200-day average, indicating a continued positive trend bias.
Looking ahead, potential risks to the market’s trend include hotter-than-expected inflation data that could delay anticipated rate cuts from the Federal Reserve. However, upcoming reports on consumer prices and retail sales are expected to provide some support for the US economy and could help alleviate concerns of a “hard landing”.
In conclusion, while there are some signs of economic slowdown, experts like Economist Nouriel Roubini remain cautiously optimistic about the US economy’s overall strength. With the Atlanta Fed’s Q3 nowcast estimating a +2.9% growth rate, the outlook for the economy remains positive. Investors should continue to monitor key economic indicators and market trends to make informed decisions about their investments.