The weekly market reports include a market position update, a stock market forecast, and an analysis of capital markets. To access the full report, you must subscribe to Premium Articles, Weekly Premium Articles, or All-in-One.
Included in this report:
- Ensemble performance.
- Weekly summary.
- Update on market positioning.
- Stock market forecast
- Capital markets update.
Section 2 of the report discusses the gold rally and random correlations. In Section 5, we discuss an important technical signal in the stock market.
1. Ensemble performance
We use two long-only cross-sectional momentum strategies to generate signals for capital markets and factor ETFs. See Section 3 below for open positions and signal updates.
Year-to-date, the weekly strategies (WeeklyReport) are up 4.6% (equal allocation, no leverage) versus a gain of 2.5% for the SPY ETF. The outperformance of the ensemble this week was due to strong gains in momentum and gold.
Gold (GLD) is up 9% year-to-date. The US dollar index (UUP) is unchanged year-to-date, and long-duration bonds (TLT) are up 2.6%. Since 2024, the ensemble is up 32% versus 28.1% for the SPY ETF. The ensemble’s (WeeklyReport) beta since 2017 is 0.28, and correlation with the S&P 500 index is 0.55. The Sharpe ratio is 0.88. See Section 3 for details on market positioning.
2. Weekly summary (February 3–February 7, 2025)
- Stocks fell due to the falling unemployment rate and tariff uncertainty.
- Large-cap stocks (SPY) ended the week with a 0.2% loss.
- Gold (GLD) gained 2.1% to new, all-time highs as uncertainty about tariffs increased.
- Long-duration bonds rebounded. The TLT ETF ended the week up 2.1%.
- Commodities were up due to higher grain and precious metal prices. The DBC ETF gained 0.5% for the week.
- Since January 3, 2022, bonds (TLT) have been down 33.3%, while gold (GLD) and large caps (SPY) have gained 54.4% and 32.2%, respectively.
- During the week, the equally weighted Magnificent Seven stocks index fell 2.3% due to TSLA (TSLA) and Google (GOOGL) plunging 10.6% and 9.2%, respectively. Nvidia (NVDA) gained 8.1%, and META was up 3.7%.
- Market sector performance was mixed this week. Consumer discretionary (XLY) fell 2.8%, but real estate (XLRE) and energy (XLE) were up 1.3% and 1%, respectively.
AI analysis of our weekly summary
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Specific disclaimer: This report includes charts that may reference price levels. If market conditions change the price levels or any analysis based on them, we may not update the charts. All charts in this report are for informational purposes only. See the disclaimer for more information.
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Charting and backtesting program: Amibroker. Data provider: Norgate Data
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