Market sectors seem to be more range-bound after some strong gains in the post-BREXIT environment. Whether stocks or bonds, the trends have flattened. This more sideways behavior has also carried over to currencies and precious metals. This flattening of trends is a reason for the lower returns for CTA's in July. Limited gains were achieved in the second half of the month. The only sectors where there are reasonable trends at the start of the month are energy and commodities and to a lesser extend global rates which are still adjust to current monetary trends.
The overall view across all sectors is that this range-bound behavior will continue without some macro catalyst to change expectations. July has been a period of risk-on for many investors but the end of month price action seems to suggest that markets are stretched and need new information to break the range. Weaker macro news has been coupled with easing monetary expectations which cause mixed trends.
For every August where nothing happens, there are periods of dislocation; nevertheless, the trends suggest that getting a good book and reading on a beach may be more productive than watching screens.
No comments:
Post a Comment