In today’s briefing:
- As The Economic Outlook Gets Worse, We’re Becoming More Upbeat
- How Market Structure Tells the Story of a Market Top
- How to Spot the U.S. Market Bottom
- AFC Iraq Fund April 2023 Update: “Tag Ends of Currency Upheaval Sparks Market Rally”
As The Economic Outlook Gets Worse, We’re Becoming More Upbeat
- Strong economies don’t have strong financial markets. Best time for equities is when policy-makers are trying to revive sluggish economies
- Global Liquidity rises as economies slow, since slower real economies need less liquidity to operate and funds are shipped back into the financial sector. The cycle bottomed in October 2022
- Equities should be valued against inflation not bond yields. Inflation is falling and it coincides with rising Global Liquidity
How Market Structure Tells the Story of a Market Top
- Market structure analysis shows a late-cycle market with leadership concentrated in a few high-quality growth stocks.
- This is the picture of a market top. New bull markets simply don’t start this way.
- Investment-Oriented accounts should be cautious and use market strength to de-risk.
How to Spot the U.S. Market Bottom
- A recession is likely on the horizon and historically stocks don’t bottom until the economy enters a downturn.
- From a top-down perspective, investors can monitor macro indicators like PMI and employment statistics to spot the ultimate market bottom.
- From a tactical perspective, alternative signals like insider buy can also be useful for timing low-risk entry points.
AFC Iraq Fund April 2023 Update: “Tag Ends of Currency Upheaval Sparks Market Rally”
- The AFC Iraq Fund was up 15.9% in April, outperforming its benchmark, the Rabee Securities RSISX USD Index, which was up 12.5% for the month.
- For the year, the AFC Iraq Fund is up an estimated 47.9% outperforming the index’s increase of 36.7%.
- The market and the fund’s solid performance for the second month in a row on the back of February’s super performance enhanced by a revalued currency, underscores the underlying strength of the market’s recovery that has discounted the currency’s upheaval, as discussed here recently, and is beginning to discount its stability.
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