Credit Suisse and Leo Wealth correctly call the ‘rally that nobody saw coming’!
This week’s update is jointly written by our Hui Si Tan (Data Analyst)
The rally that ‘nobody saw coming’!
What a rally we have had over the last few weeks. And it does seem to have caught a few people by surprise. Over the weekend, Bloomberg had an released an article about the stock rally that “Nobody Saw Coming”. It makes interesting reading and has quotes from some brand name investors/analysts
However, some of the analysts we follow (notably Credit Suisse and Leo Wealth) were very constructive on the market and did manage to call the rally correctly.
For those who believe in Fibonacci retracements, the markets (see NASDAQ 100 chart below) have done a textbook 61.8% retracement so far. It will be exciting to see where we go from here.
Investors bought into the Equity rally
We saw significant selling of Fixed Income assets just before the Fed meeting a few weeks ago. This also coincided with some panic selling of Equities just before the rally started.
Since then we have seen Equity buying emerge, while Fixed Income assets continue to be sold (for the purpose of this week’s analysis we have ignored any purchases of T-Bills, investments into Money Market Mutual Funds etc from the definition of Fixed Income assets)
Focus is on Tech, Consumer Non-Cyclicals
Bulk of the buying has been in Technology, followed by Consumer Non-Cyclical and Financial stocks
tl;dr
- The equity rally for the last few weeks seems to have caught most analysts by surprise, with a few notable exceptions
- Fixed Income seeing continued selling (with the sale proceeds being moved to T-Bills and Money Market funds)
- Equity buying has favoured Tech, Financial and Consumer Non-Cyclical stocks
Please note that this newsletter is just a data analysis of actual investor behavior and does not constitute investment advice in any form.
