The weekly market reports include a market position update, a stock market forecast, and an analysis of capital markets. To access the full report, you must subscribe to Premium Articles, Weekly Premium Articles, or an All-in-One subscription.
Announcement: Time is precious, especially in markets. Subscribers prefer actionable content. Along these lines, we have updated the format of these weekly market reports to include long-only signals for ETFs from two cross-sectional momentum models, one for capital markets and another for factors, for informational purposes only. We will also include market statistics when we think they provide context. The objective is to significantly increase the value of the weekly reports.
Included in this report:
- Weekly summary.
- Statistically significant.
- Market positioning update.
- Stock market forecast.
- Capital markets analysis.
1. Weekly Summary (June 3–June 7, 2024)
- Stocks (SPY) rose 1.3% to new all-time highs amid a meme stock frenzy, with Nvidia surging 10.3%.
- Gold (GLD) fell 1.7% on rumors that China has put buying on hold.
- Bonds (TLT) gained 1.5% but ended the week off their highs after a stronger-than-expected employment report.
- Commodities (DBC) fell 2.2% during the week after a sell-off in precious metals and grains.
- The US dollar index (UUP) ended the week up 0.3% after a rebound on the last day of the week.
- Gold (GLD) has outperformed stocks (SPY) since 2022 by a wide margin, with a return of 23.8% versus 16.4%, respectively.
- Since January 3, 2022, bonds (TLT) have been down 33.5%, while large-caps (SPY) have gained 16.4%.
- The technology sector (XLK) gained the most for the week, at 2.6%. The utilities sector (XLU) was down the most for the week, at -3.8%.
2. Statistically significant
A social media account known for its obsession with market statistics claimed this week that when the stock market gains more than 4% in May, the return for the rest of the year is 10% higher on average.
Note that the S&P 500 index’s gain of 4.8% in May of this year was more than 4.01%, or one standard deviation from the sample mean, with data starting in 1945. This has occurred 12 times since 1945 (the sample size is 80).
With the S&P 500 index up 4.8% in May, is this the time to put 100% in stocks with maximum leverage? The following is how we approach this and similar claims:
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Specific disclaimer: This report includes charts that may reference price levels. If market conditions change the price levels or any analysis based on them, we may not update the charts. All charts in this report are for informational purposes only. See the disclaimer for more information.
Disclaimer: No part of the analysis in this blog constitutes a trade recommendation. The past performance of any trading system or methodology is not necessarily indicative of future results. Read the full disclaimer here.
Charting and backtesting program: Amibroker. Data provider: Norgate Data
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