📊In Which Phase of the Market Cycle Are We Now?
📊In Which Phase of the Market Cycle Are We Now?
April/24 Update for Bonds, Currencies, Equities, Growth Stocks and Crypto
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Bond Market
Federal Reserve's Inflation Monitor Suggests Easing Price Pressures: Rate Cut Speculations Rise
The inflation gauge closely monitored by the Federal Reserve indicates that price pressures are gradually easing, with inflation decelerating from a 0.4% increase from January to February to a 0.3% increase, suggesting a potentially encouraging trend.
Core prices, excluding volatile food and energy costs, also suggest lower inflation pressures, with a rise of just 2.8% from 12 months earlier, the lowest figure in nearly three years.
This data might influence the Federal Reserve's interest rate decisions, with speculation about rate cuts in the coming months if inflation continues to ease.
Alpha Hedge Bond Portfolio
The Bond Market's driving force is the 20-Year Rate, currently in Phase 6 (Denial Phase). A Hedge Position was established in November 2023. As of March 29, 2024, this Hedge Cycle experienced a return of +1.77%, the Alpha Hedge Bond Portfolio has yielded +312.59% since July 2013.
The benchmark for this portfolio is the TLT 0.87%↑ ETF, which recorded a -13.89% performance since July 2013.
The Alpha Hedge Currency Portfolio currently accounts for 15% of the overall Alpha Hedge Portfolio. We plan to maintain our hedge position size within the bond market throughout April.
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Currency Market
Bullish Outlook Amid Bank of Japan's Rate Hikes
Yen struggle at the 152 level, indicating significant resistance.
However, there's anticipation of a breakout above this level, suggesting a bullish outlook for the USD/JPY pair.
The Bank of Japan has slightly increased interest rates, but the interest rate differential between the US dollar and the Japanese yen continues to favor holding this currency pair.
Alpha Hedge Currency Portfolio
The Currency Market's driving force is the US Dollar, currently in Phase 1 (Hope Phase). A Hedge Position was established in January 2024. As of March 29, 2024, this Hedge Cycle experienced a negative return of -1.31%, yet it has yielded +83.34% since March 2013.
The benchmark for this portfolio is the UUP 0.00%↑ ETF, which recorded a +26.03% performance since March 2013.
The Alpha Hedge Currency Portfolio now constitutes 11% of the total Alpha Hedge Portfolio. We intend to keep the hedge position in April. However, If the asset move into Phase 2 during April, we will close the hedge and open an Alpha Position in May.
Understand the Alpha Hedge Currency Portfolio.
Equity Market
S&P 500 Celebrates Best Quarter in Five Years: Mixed Outlook Amid Economic Optimism and Inflation Targets
Stocks have seen their best first quarter in five years, driven by investor optimism about the US economy's strength and the potential for inflation to approach the Federal Reserve's 2% target.
The S&P 500's performance has sparked debates about the possibility of a continued rally or a potential pullback after five consecutive positive months. Equity strategists express a mix of cautious optimism and concern, with some maintaining year-end targets while watching for economic resilience and better-than-expected earnings to justify current market valuations.
The market's rally has been broad, encompassing sectors sensitive to economic shifts, and there's a divided outlook on future market directions, influenced by earnings expectations and Federal Reserve policies.
Alpha Hedge Equity Portfolio
The Equity Market is in Phase 3 (Belief Phase). Accordingly, an Alpha Position was assembled in January/24. In this Alpha Cycle, up until March, 29, 2024, it yielded a return of +31.22%, and +1,380.08% since June 2013.
The benchmark for this portfolio is the SPY 0.02%↑ ETF, which had a +219.28% performance since June 2013.
The Alpha Hedge Equity Portfolio represents 26% of the Alpha Hedge Portfolio. We will continue to uphold this Alpha Position in April.
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Growth Stocks Market
Growth Stocks Defy AI Sector Setback: Investor Confidence Buoyed by Strong Small-Cap Performance
The market's positive response, despite the fallback in AI leader stocks, highlights the underlying strength and investor confidence in the growth stocks sector.
This scenario suggests that while key players like Nvidia $NVDA experienced a temporary setback, the general market sentiment towards growth stocks, especially in innovative sectors like AI, remains positive.
Small-cap stocks played a significant role in leading the market, registering strong gains.
This performance underscores the investors' willingness to take on riskier assets, which often include growth stocks known for their potential for high returns.
Alpha Hedge Growth Portfolio
Growth Market is in Phase 4 (Euphoria Phase). Accordingly, an Alpha Position was assembled in December/23. In this Alpha Cycle, up until March 29, 2024, it yielded a return of +44.34%, and 1,221.01% since October 2013.
The benchmark for this portfolio is the QQQ 0.15%↑ ETF, which had a +462.82% performance in the same period.
The Alpha Hedge Growth Portfolio makes up 16% of the Alpha Hedge Portfolio. The Alpha position will be preserved in April.
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Crypto Market
Bitcoin's Volatility Overtakes Ether: Bullish Expectations Surge Ahead of Halving Event
Bitcoin's volatility has recently surpassed that of Ether, with a notable spread between their 30-day historical volatility gauges.
This shift is attributed to factors like spot ETF inflows and the upcoming Bitcoin halving, which have injected greater volatility into Bitcoin.
Alpha Hedge Crypto Portfolio
Crypto Market is in Phase 4 (Euphoria Phase). Accordingly, an Alpha Position was assembled in February/23. In this Alpha Cycle, up until March 29, 2024, it yielded a return of +171.89%, and +11,335.51% since November 2016.
The Benchmark for this portfolio is the Bitcoin, which had a +9,580.44% performance since November 2016.
The Alpha Hedge Crypto Portfolio comprises 21% of the Alpha Hedge Portfolio. We will retain the Alpha position in April.
Understand the Alpha Hedge Crypto Portfolio.
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