Last December, we put out our year-ahead outlook; we provided a roadmap explaining why we were the most constructive we had been in years. In short, our bull thesis was centered around
Better earnings
Significant decline in inflation
Accommodative Fed
We acknowledge that the S&P 500’s rally in the first 5 months of this year (+11.81% YTD) has been dramatic. Are we still bullish? You bet. Don't fade momentum.
The overall S&P isn’t nearly as attractive as the S&P 493 or even the rest of the world, which is a panacea of opportunities.
To be clear, we are still very constructive on stocks, but more so in the US mid-cap, natural resource, commodity equities, precious metals, and non-US markets, particularly Japan. Really, the key in our methodology for US large-cap portfolio construction is to equal weight your exposures. If you still hold onto US large market cap-weighted indices, your products’ valuations are probably relatively expensive. If you equal weight your large-cap risk, you could lower valuation down 5 turns.
Every week, our research team aggregates all the macroeconomic indicators that Astoria monitors. We debate, discuss, and analyze each of these statistics. These data are centralized into a database, and we study the rate of change.
I have asked Nick Cerbone to formally detail a document we can share with our clients. Please reference our Cycle Indicator Deck.
Also, Frank Tedesco sent out a message, but I am personally very excited about Astoria’s inaugural Macro Summit, which will be held at the NASDAQ Headquarters on Tuesday, October 29th. We have a stellar lineup of speakers. You can see our panelists and topics and register here: Astoria's Macro Summit.
Best,
John
Returns are as of Tuesday, May 28th, 2024.
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