The ETF Portfolio Strategist: 23 JUL 2023
Trend Watch: Global Markets & Portfolio Strategy Benchmarks
Global markets were mostly higher last week, lifting our G.B16 global benchmark to yet another new high for the past year-plus. The rally of late that’s fired up prices has probably gone too far too fast, but until there’s a significant change with macro or geopolitical news it’s hard to imagine that markets overall are set for anything more than a healthy pullback to consolidate recent gains. See this summary for design details on the strategy benchmarks and this summary for how the metrics in the tables below are calculated.
Upside momentum continues to look favorable for G.B16 and are other portfolio benchmarks. All five are still posting Signal scores of 5, one notch below the strongest bullish reading.
Most of G.B16’s components continue to push higher, led by equities in Africa (AFK).
US small-cap shares (IJR) rose for a second week, extending the ETF’s moderately bullish Signal score for two weeks running.
US stocks overall (VTI) pushed higher for a second week, too. VTI is now at its highest weekly close since January 2022, which is to say the market may be poised to recover the last tranche of 2022’s losses.
Momentum for near term is probably overextended for VTI, but the overall trend still looks encouraging. Consider the #4 momentum Signal in the chart below. Before the previous bull trend ended the fund enjoyed well over a year of upside price bias, which accompanied a powerful rally that lifted VTI more than 70%. No one knows if a repeat performance is brewing, but if it is we’re probably in the early stages, or so the chart below implies.