
Momentum Models Increase Equity Bullishness and US Rates Bearishness
Bilal Hafeez and Ben Ford
Momentum models delivered a fourth consecutive week of positive returns, led by equities (+0.9% WoW).
Bilal Hafeez and Ben Ford
Momentum models delivered a fourth consecutive week of positive returns, led by equities (+0.9% WoW).
John Tierney
Nvidia’s stock (NVDA) jumped by a third after its CEO forecast quarterly revenue will jump from $7bn last quarter to $11bn next quarter.
Bilal Hafeez and Viresh Kanabar
Euro area inflation surprised to the downside last Thursday (1 June). The flash estimate for CPI came in at 6.1% YoY versus 6.3% expected, with core also surprising to the downside at 5.3% versus 5.5% expected. In response, yields across the eurozone dropped, with German 2Y Schatz falling by almost 14bps on the week (Chart 3).
John Tierney
For all the hot air it generated, markets were correct to simply ignore the ongoing drama around the debt ceiling and outlook for Federal Reserve (Fed) policy.
Bilal Hafeez and Ben Ford
Momentum models delivered a third consecutive week of positive returns, led by equities (+0.8% WoW).
John Tierney
Last week was supposed to be about the debt ceiling drama, but Nvidia (NVDA) stole the stage with its earnings and aggressive demand outlook.
Bilal Hafeez and Viresh Kanabar
NVDIA (NVDA) stole the show last week, surging 24.6% after providing better-than-expected guidance on the impact of AI on its revenues. Meanwhile, the broader Philadelphia Semiconductor Index (SOX) rose by almost 11%. The impact on NVDA’s bottom line is material.
Bilal Hafeez and Ben Ford
Momentum models delivered a second consecutive week of positive returns, led by equities (+0.8% WoW).
Viresh Kanabar
We consolidate our favourite biases into one, easy-to-read, weekly report! Please find the original pieces linked throughout and a summary table at the end of the document. Reach out to us on Slack or email the author with any questions about the content.
John Tierney
Regional banks show few signs of recovering more than 10 weeks after the Silicon Valley Bank collapse. To be blunt, the crisis is morphing into a slow-moving trainwreck.
Jon Caplis
The PivotalPath Composite Index returned 0.5% in April amid economic uncertainty around the US debt ceiling, along with recalibrated interest rate hikes and recession probabilities.
Bilal Hafeez and Viresh Kanabar
It was Fed speaker galore last week as we had 14 public appearances from FOMC members Bostic, Kashkari, Cook, Mester, Barr, Williams, Logan, Jefferson, Bowman and Powell.
John Tierney
Equities powered through the fog of the debt ceiling imbroglio, finally rallying above the trading range of the past several months.
John Tierney
Home Depot (HD) and Target (TGT) reported weaker sales and confirmed consumers are not buying larger-ticket discretionary items. The primary reason is satiated demand and altered consumer preferences.
Bilal Hafeez and Ben Ford
Momentum models returns proved positive over the past week led by a positive outing in equities (+0.9% WoW). However, performance is poor over a three-month horizon. The models we track have lost 1.4%, on average. Equity momentum models (-4.2%) have fared worst.
Bilal Hafeez and Viresh Kanabar
This month, we expand the coverage of our asset class views and provide further granularity in each component.
John Tierney
The incoming data points to both boom times and recession conditions – little wonder markets are stuck in narrow trading ranges!
Bilal Hafeez and Viresh Kanabar
Last week, Chinese trade data disappointed to the downside. Imports fell 7.9% YoY through April, with lower imports of crude oil, coal, iron ore, and copper than in March.
Jon Caplis
PivotalPath examines the performance of hedge fund indices under different inflation regimes.
The benefits of equity investment include capital gains and dividends. However, we also see investment in stocks as a core part of a diversified strategy alongside other asset classes such as bonds and commodities. A global equities strategy offers geographical diversification, too.
It is possible to invest in equities at an individual level, but we gear most of our research around exchange traded funds (ETFs) as these provide better, more diversified exposure to macro trends instead of company fundamentals.
For most investors, equities offer an attractive way to grow wealth over the long term. There are many types of equities. And like any asset, they can be volatile in the short term. As a risk asset, they tend to suffer during downturns or periods of bearish sentiment. Yet equity investment generally offers higher returns than bonds and cash savings in the long term.
Your portfolio allocation to equities will largely depend upon your risk appetite. If you have an aggressive risk profile, you could potentially allocate 70%. With a moderate risk profile, you could consider an allocation of 50%, while a conservative risk profile might lead you to allocate 20%.
To gain an overview of our equity market investment views, read our latest Prime Trade Ideas report.
Is the S&P 500 a Good Investment?
How Long Will This Bear Market Last?
What Is a Put Option?
What Is a Stock Split?
Equity investing is money that people invest in a company by buying shares of the company on the equity market. Investing in equities allows investors to own a share of the company and profit either via a rise in the company’s value (capital gains) or the generation of dividends.
Equities in the stock market are simply shares of a company that investors and other market participants buy or sell via exchanges. There is no difference in equities vs stocks.
The market value of equity is the total value of a company’s equities expressed in its denominated currency (I.e., dollars). It is also known as market capitalization, and it is calculated by multiplying the current price of a single stock by the total number of outstanding shares.
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