ETF Tracker StatSheet
You can view the latest version here.
AI BOOM FUELS MARKET OPTIMISM, BUT WILL HISTORY REPEAT ITSELF?
- Moving the markets
The markets defied the central bankers’ warnings of more rate hikes and pushed the major indexes higher to end the quarter with a bang. The tech sector, led by a few AI darlings, bounced back from a slump, and fueled the rally with hopes of a bright future and a dovish Fed.
But not everyone is buying the bullish story. Some traders are bracing for more volatility and profit taking in the second half of the year, as the rally has stretched the valuations and diverged from the credit markets.
Others are singing the disinflation song and urging the Fed to hold off on tightening to avoid a recession. They might be singing too soon. Inflation is still running hot, as evidenced by the soaring wages and the elevated core PCE.
The bond yields have flattened, but not collapsed. The dollar has weakened but has not crashed. Gold has retreated, but not surrendered.
The inflation monster is still lurking, and it might surprise us in the second half of the year. As Warren Buffett once said, “What we learn from history is that people don’t learn from history.”
Will that apply to the current AI boom?
- “Buy” Cycle Suggestions
The current Buy cycle began on 12/1/2022, and I gave you some ETF tips based on my StatSheet back then. But if you joined me later, you might want to check out the latest StatSheet, which I update and post every Thursday at 6:30 pm PST.
You should also think about how much risk you can handle when picking your ETFs. If you are more cautious, you might want to go for the ones in the middle of the M-Index rankings. And if you don’t want to go all in, you can start with a 33% exposure and see how it goes.
We are in a crazy time, with the economy going downhill and some earnings taking a hit. That will eventually drag down stock prices too. So, in my advisor’s practice, we are looking for some value, growth and dividend ETFs that can weather the storm. And of course, gold is always a good friend.
Whatever you invest in, don’t forget to use a trailing sell stop of 8-12% to protect yourself from big losses.
- Trend Tracking Indexes (TTIs)
The major indexes ended June on a strong note, lifting our TTIs higher. Monday will be a half-day of trading before the July 4th holiday, so I won’t post a commentary. I expect some portfolio changes as we enter the new month.
This is how we closed 06/30/2023:
Domestic TTI: +4.92% above its M/A (prior close +4.46%)—Buy signal effective 12/1/2022.
International TTI: +7.49% above its M/A (prior close +7.08%)—Buy signal effective 12/1/2022.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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