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Perspectives

Leadership Key for Market Call

by Fortem Financial April 15, 2024

The breakout in rates, combined with the bid to USD, strength from Oil, and the persistence from Gold, all conspired as motivation to tactically raise our guard over recent weeks. But one of the more difficult pursuits in this business is differentiating between a modest corrective phase vs. the start of something more sinister.

Our base case is that this near-term weakness should be viewed as the former, but we’re incrementalists and always on guard for challenges to that thinking. About 45% of the S&P traded to a 1-month low last week, just shy of the 50-60% zone that the good tradeable lows often start to take shape.

With election year seasonality not really helping, it’s likely early to fully lean into weakness yet. If something nastier is out there – e.g., if the moves in rates or Oil are going to start to hit the economy – we’d expect to see it manifest through leadership changes.

The persistent strength from the Discretionary vs. Staples pair has been a feature in our work for the last 15 months – it’s pausing here, but not breaking down. Industrials also went out last week at fresh relative performance highs. The only subtle shift we see is from the Utilities – our curiosity is always piqued when higher bond yields is accompanied by relative outperformance from Utes… recently, that’s quietly been the case and it bears watching.

Globally, U.K. equities broke out last week – propelled by the strength coming from the Basic Resource and Energy groups.

Source: Strategas

 

Market and Index Changes for the Week Ending 4/5/2024

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments. Data provided by Refinitiv.

 

Sincerely,

Fortem Financial
(760) 206-8500
team@fortemfin.com

 

 

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Brian Amidei, along with Partners Joseph Romano and Brett D'Orlando have also been named *2014, 2015, 2016, 2017, 2018 Five Star Wealth Managers!

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Five Star Professional Disclosure:
The Five Star Wealth Manager award is based on 10 eligibility and evaluation criteria: 1) Credentialed as an investment advisory representative (IAR) or a registered investment advisor; 2) Actively employed as a credentialed professional in the financial services industry for a minimum of five years; 3) Favorable regulatory and complaint history review; 4) Fulfilled their firm review based on internal firm standards; 5) Accepting new clients; 6) One-year client retention rate; 7) Five-year client retention rate; 8) Non-institutionalized discretionary and/or non-discretionary client assets administered; 9) Number of client households served; and 10) Educational and professional designations. The inclusion of a wealth manager on the Five Star Wealth Manager list should not be construed as an endorsement of the wealth manager by Five Star Professional or the magazine. The award methodology does not evaluate the quality of services provided. Additional information about this award is available at: fivestarprofessional.com/2016FiveStarWealthManagerMethodology.pdf
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Data Sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market Data: Based on reported data in WSJ Market Data Center (indexes); U.S. Treasury (Treasury Yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness.

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