Weekly Market Pulse: Never Mind

Basically, all asset classes got hit last week and value did take the biggest hit. But value is still the overwhelming winner YTD and over the last year for mid and small caps. Global stocks pretty much moved in line with the US although Japan did a little better. But of course, it had already corrected more and is barely up on the year. Emerging markets were down last week too but considering the move higher in the dollar I’m surprised they weren’t down a lot more. Outperformance with a rising dollar is unexpected and warrants extra attention.

The most cyclical sectors took the biggest hits last week but why wouldn’t they? They are also the sectors up the most this year and over the last year. Some of these are still overbought though and probably have more correcting to do. But if the economy continues to improve they are probably the places you want to look to put money to work. Financials took a big hit last week but that was probably mostly about the yield curve which continues to flatten. The big question is whether we’ve seen the peak of the yield curve and I still think the answer is no. If that is right, financials are probably a place to look for buys as well. 

It is human to want to make sense of every market move. We want to believe that there are always rational, logical reasons why things move the way they do. But there aren’t always obvious reasons or any reason beyond the old more sellers than buyers or vice versa. Accept it and don’t try to explain everything. Any explanation we come up with is just as likely to be wrong as right anyway. Learn to say never mind and concentrate on things you can control. 

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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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