SPHB News and Press, Invesco S&P 500 High Beta From 10/04/22

Summary Last week, the 2-year Treasury rate rose above 4.3%, the 10-year Treasury rose above 3.9%, and mortgage rates topped 7%, their highest level in 20 years. By reducing its balance sheet by $95 billion per month, the Fed has sent the 10-year rate substantially higher. The...

Summary Elevated inflation, currencies, slowing global economic growth expectations, and reduced central bank liquidity remain key economic considerations. Volatility measured by the VIX spiked in September after declining in August. This wall of worry is real, but it is impor...

Summary After the S&P 500 peaked in March, 2000, at 1,550, there wasn’t a new all-time-high made consistently until early May, 2013. The returns are dropping sharply thanks to this year's equity market. It’s always hard to make a case for “non-USȁ...

Summary Everywhere today, conversations are being had about what is happening in asset markets and the economy. Many people are in varying degrees of concern, alarm, and distress. Few are yet in a panic. History assures us that they will be. The average portfolio allocation re...

Summary Measured from its closing value of 4,110.41 on Monday, 12 September 2022, the index has dropped by 524.79 points to end 2022-Q3 at 3,585.62. We think investors are setting stock prices more negatively in the new market regime because of their developing expectations for ho...

Summary Asian markets continue to struggle this year, thanks in large part to the weak China market. The only asset class showing positive performance is volatility. It has been a bumpy ride down this year, with six failed rally attempts. We are now 25.3% below the high water mark...

Summary The new regime poses an unavoidable trade-off for central banks: tame inflation by hiking or preserve growth. We see them overtightening rates, so keep risk low. UK gilt yields reached 14-year highs before the Bank of England intervened to halt the selloff. Yields on 10-ye...

Summary YTD, the S&P 500 is now down 24% while bonds have their own double-digit losses. Like stock valuations, currency valuations aren’t great timing tools but over a 3-year period after becoming undervalued, the outperformance is strong. Consumer defensive stocks...

Summary The Great Financial Crisis taught us about the extraordinary capacity of central bank balance sheets and fiscal authorities to absorb financial shocks and mitigate the effect of massive deleveraging. The politicians and monetary policymakers have become too used to their s...

Summary We are now approaching the market region which can support a major rally. The nature of the next rally will tell me if we are still on track for higher market highs or not. One way or another, I am expecting a major bear market to begin and last at least 7-8 years, and...