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The downgrade by Fitch of the sovereign risk rating of the United States to AA+, the second time this has happened, has put a lid on the market’s risk appetite. We believe this could be the correcting trigger that we mentioned in our previous newsletter, and is likely to be another good opportunity to add […]

Mood in the markets has shifted to extreme optimism, as the dominant narrative is that the economy has managed to control inflation without going through a recession. Corporate earnings have also been better than feared. We feel it’s time to become even more selective..

US stock market indices have belied widely held expectations and gone up substantially in the first half of 2023. The macroeconomic data, however, is telling a different story. Will the rally continue? It’s possible in the near term as bullish momentum continues. But it’s difficult to see it go on for much longer given the

Investors have turned extremely bullish after latest inflation data showed headline CPI dropping to 3%. Our analysis suggests markets are pricing a near perfect environment, which increases their vulnerability to negative developments in the months ahead.

A few interesting things happened in the U.S. stock markets last week.The S&P 500 closed more than 20% off its October lows on June 8th. At 248 trading days, the recent run back to a bull market was the longest bear run for the S&P since 1948. In doing so, it reached the 4,300 level

On June 3rd, President Joe Biden signed the Fiscal Responsibility Act of 2023 to raise the country’s debt ceiling. As expected, after much political brinksmanship and at the last minute (in this case, with 2 days to go for the ‘x date’) Also as expected, with minimal cuts in spending. In a nutshell, it suspended

Stocks rallied on rising optimism that D.C. lawmakers will reach a deal to raise the U.S. debt ceiling, led by the tech-heavy Nasdaq, which closed at its highest level since August. For the full week, the Dow Jones index lost 1%, but the S&P 500 edged up 0.3% and the Nasdaq jumped 2.5% for a

The stock market rally strengthened this past week. The Nasdaq composite and S&P 500 hit 2023 highs, with the Nasdaq 100 setting its best levels in more than a year. Market breadth continued to be very narrow, with gains led by AI-infused tech leaders such as Nvidia (NVDA), Advanced Micro Devices (AMD), Service Now (NOW),

Markets remained relatively range-bound last week, with a continuation of the battle between strong big tech and weak cyclical risk-on sectors. On economic data, the number of Americans filing for unemployment benefits rose by 22 thousand to 264 thousand on the week ending May 6th, the most since October 2021, and well above market expectations

Another week, another bank in trouble We have repeatedly alluded in our newsletters to the lag effect of the rapid interest rate hikes set in motion by the U S Federal Reserve in early 2022 and warned that it would take several months before the full effects become clear Since March 2023 almost exactly a