Market review 24.04.07
Short-term bearish, medium-term bullish
Hello everyone,
Over the last few years, stocks and commodities have been in a tug-of-war.
In 2022, high inflation resulted in interest rates climbing rapidly. This hurt stocks, with the S&P 500 seeing a 28% drawdown.
By late 2022, key commodities weakened significantly, and rates leveled off. This allowed stocks to regain life, with major themes of AI and infrastructure especially soaring.
During Aug-Oct 2023, oil prices saw a relief rally, and rates resumed higher. Stocks suffered again, with the S&P 500 seeing an 11% drawdown. This was a shallower decline, and the inflation scare was temporary.
Today, inflation is back on peoples’ radar. Metals & energy have climbed on relative strength screens, while long-term Treasuries (TLT) are one of the weakest parts of the market. Sensitive segments within the equity market are showing cracks.
In today’s post, I will discuss:
Short-term warning signs for equities.
Support levels to watch and why I believe any pullback will likely be shallow.
The longer-term trend remains in favor of stocks over commodities.
Let’s begin.