SHY - Has Risk-On Run Out Of Road?
2024-07-08 15:10:00 ET
Summary
- The aggressive portfolio continues to outperform its conservative counterpart by a wide margin, suggesting that animal spirits continue to favor a risk-on position.
- The US stock market’s risk appetite continues to skew bullish, based on the ratio of the broad market vs. low-volatility shares.
- The ratio of medium-term US Treasuries vs. shorter-term counterparts appears to be forming a base after an extended slide.
More investors are asking the question lately, in part because markets are seemingly defying gravity and ignoring various macro and geopolitical risks. Yet, a broad reading on market trends has yet to signal trouble ahead, based on a review of ETF pairs. That doesn’t ensure the bull run will continue, but at this point, the idea of calling a top and going defensive is based primarily on contrarian-based forecasting. Trend analysis, by comparison, still reflects optimism, rational or otherwise. Pick your poison....
Has Risk-On Run Out Of Road?