Yes, this week was painful for stocks.
But putting things into perspective, equities have been more resilient to higher rates recently versus previous periods of rising rates. Source: Edward Jones
Commodities are currently undervalued vs. equities
Source: Vontobel
Equity market positioning is VERY extended (which is bad from a contrarian perspective).
As shown in the chart below, Asset Managers have built the largest equity futures position in history 🚨🚨🚨 Source: Barchart, Goldman Sachs, CFTC
Goldman is embracing the rotational trade as well:
"Sell your Tech Stocks and invest elsewhere" says Goldman Sachs
Yesterday was very painful for diversified 60-40 (equities / bonds) portfolios
Source: Bloomberg
Visualizing the growth of $100, by asset class returns across U.S. equities, bonds, real estate, gold and cash since 1970.
source : visual capitalist
US stocks are expensive. That is true, but it is mainly due to tech.
If you look around you'll notice that areas like the cyclicals (energy, financials, materials, and industrials) are all fairly valued and in some cases outright cheap. Source: Carson Investment Research
The 60/40 portfolio doesn't fit all macro regimes by Alfonso Peccatiello / The macro compass
The 60/40 portfolio (60% equities / 40% bonds) did work great for 3 of the last 4 decades, and that's because the macro regime was one of predictably low growth and inflation, and Central Banks ready to support markets and economies. But are you sure the next 10 years be the same as the last 10 years?
