INVESTMENT MANAGEMENT

The recent broad-based rally has now put all equity indexes across size and geography comfortably above their long-term moving averages for the first time this year, a welcome shift away from the US tech-driven market environment.

While September has historically been the toughest month for stock performance, markets appear well-positioned for a strong run into year-end, leaving our Momentum Dial in a Positive position.

After the US economy added just 73,000 jobs in July, economists are anticipating a meager 75,000 additional jobs for August, likely the primary reason that the Fed has telegraphed a rate cut later this month.  

Job-related uncertainty has dampened consumer spending, which for the first time in history has been outstripped by technology-related corporate infrastructure spending. On balance, our Fundamental Dial remains in a Negative position. 

Despite a strong Q2 earnings season where corporate profit growth more than doubled expectations, equities have only gotten more expensive on a price-to-earnings basis as investors continue to pull forward future earnings growth into current price appreciation. As such, our Valuation Dial remains Negative.

On balance, our composite positioning remains somewhat defensive, with one dial in a Positive position but two dials remaining Negative.