Monthly Market Monitor – July 2020

Given all that has happened in the 4 months since the virus started to seriously impact the global economy, it is amazing how little the long-term market trends have changed.

For most of the last decade, US stocks have outperformed the rest of the world and that trend has not been broken by the virus:

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Growth stocks – and particularly tech stocks – have also outperformed for most of this cycle and the virus just accelerated that trend:

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Small-cap stocks have shown the same tendency:

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Nasdaq continues to outperform the S&P 500:

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Stocks have outperformed commodities the entire cycle and that trend also accelerated during the virus crisis:

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US government bonds have continued to outperform international government bonds:

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Long-term bonds continue to outperform short-term:

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Gold continues to outperform the general commodity index:

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Stocks continue to outperform real estate:

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US real estate continues to outperform international:

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A lot of these trends are influenced by the trend of the dollar. The dollar index has been strong and steady for nearly five years and that hasn’t changed either:

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None of these trends will last forever, but many of them have been in place for years, and changing them will not be easy. Changing these trends will also likely require a change in the dollar trend. Any long-term trend change will start with a short-term trend change that becomes an intermediate-term trend change. That may be happening now as the dollar peaked in mid-March and broke under the 200-day MA in late May. That change corresponded with other short-term trend changes:

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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