Market Notebook

PRICE ACTION:
Equity prices, as measured by the ticker SPY, closed lower while bond prices, as measured by the ticker BND, closed higher over the last week.

SPY    -2.41%
BND    +0.97%

TECHNICAL ANALYSIS:
SPY price appears to be trending upwards.

Last week’s price action in ticker BND signaled the potential for a regime change from consolidation towards trending higher.

SENTIMENT:
The price moves in equity and bonds last week signal market participants’ concern regarding economic growth in the U.S. The data-driven concerns regarding growth were exacerbated by continuously fluctuating tariff discussions that have the potential to affect global trade negatively.

ECONOMY AND FUNDAMENTALS:
Economic fundamentals remain positive, with data suggesting the U.S. economy remains resilient in the face of geopolitical and trade-related turbulence.

Since the economic fundamentals remain positive, last week’s price action could be considered a “speed bump.” Tariff negotiations need to be concluded and uncertainty removed for the economy to move forward in a powerfully positive way.

The longer uncertainty is present, the more negative investor sentiment becomes. There is a risk of a negative feedback loop. Thus far, price action does not suggest we have entered that loop. However, with bond prices breaking higher, investors should be on the lookout for negative momentum in sentiment. 

All the best during the week ahead!

Disclaimer: Nothing in this discussion should be considered investment advice. The content of this discussion is strictly my personal opinion and subject to change at a moment’s notice. Investment advice can only be provided to you by your investment professional and not by a general market discussion such as this one. If you wish to speak with an investment advisor, contact us. We can probably help.