Market review 24.12.28

Keeping the market’s main message in focus

Hello everyone,

This month, TNX (10-year Treasury yield) crossed above the 3-month yield – the first time in over two years!

Like TNX, long-term fixed mortgage rates have also remained stubbornly high. Many market participants have feared that persistently elevated borrowing rates and inflation pressures would crush the economy. Meanwhile, equity markets have climbed a wall of worry over the past 2 years.

In today’s post, I want to reiterate the market’s message: Stocks (especially consumer discretionary and financials) are bullish. Inflation & rate pressures should not concern market participants.

Let’s begin.

Market Leadership

SCTR rankings of the top 11 US sector ETFs tell us everything we need to know.

Consumer Discretionary and Financials are leaders. Materials & Energy are laggards. This is a message that crippling inflation and rate pressures are not a concern to the market – quite the opposite!

The 52-week ETF Leadership board conveys a similar message.