Economic Strength vs. Expected Corrections: my Weekly Market and Portfolio Review
February 4th, 2024 - Update
Here is my quick weekly take on the markets and my Portfolios.
I have been writing for months about the imminent recessions that have never materialized. It seems to me that the “problem” is that the US economy is still too strong and that might delay the time for the FED to start cutting rates.
Now, looking at liquidity, M2 is not decreasing anymore and has been stable for many months now:
It matters because the FED is not choking the economy anymore. The % of banks that are tightening their lending is trending down at this point.
The manufacturing index, although in negative territory (below 50), is recovering:
The price of oil, even with the ongoing conflicts in the world, is not picking up and had a strong negative week:
Also, the 10-year treasury yield is trading around 4% and not breaking out to the upside:
Looking at the market indexes, the equal weight SP500 below managed to stay positive during the week but it has been moving sideways for about 7 weeks now:
While the Nasdaq keeps grinding higher:
In a nutshell:
The market is extended and I expect a correction in the next few weeks;
There are no macro signs that are calling for a market severe correction;
If economic data keeps coming positive (tamed inflation, stable job numbers, good consumer demand numbers, etc) then the market can keep going;
I’ll keep an eye on the strongest sectors (technology) to find opportunities;
It is safe to stay flexible, prudent, and defensive as a correction might hit at any time;
PORTFOLIOS UPDATE
First, let’s have a look at my 2024 7-picks portfolio. After the 54% performance of my 2023 10-picks portfolio, I shared here my new 2024 portfolio. It is meant to be a one year “buy and hold” portfolio. Here it is:
Thanks mostly to NVDA 0.00%↑ , APP 0.00%↑ and JBI 0.00%↑ I am up 8.4%, twice as much as the SP500.
Excellent performance so far. Let’s see what it will do for the rest of the year.
10X SMALL CAP PORTFOLIO (link):
Last week I was stopped out from ACMR 0.00%↑ for a 9% loss. My HITI 0.00%↑ order was triggered. I have updated my Stop Loss levels as shown below.
The Portfolio is at a 40% return and 16% above the SP500.
Here is what I am doing this week:
Create a BUY STOP order for 1470 shares of LXRX 0.00%↑ at 1.90 USD and if triggered, I’ll place my first Stop Loss at 1.59USD
10X LARGE CAP PORTFOLIO (link)
I have updated my Stop Loss levels as shown below. The Portfolio is performing well thanks to SMCI 0.00%↑ and also DKNG 0.00%↑ looks promising. I’m up 42% and 22% above the SP500 over the same period.
Here I am not touching anything as I am fully invested.
Have a great week ahead.
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Important: This is not investment advice. Consult a licensed financial advisor before making any investment decision.