Weekly Risk Report 2/26/2010
This week we had Relative Valuation and Speculation rise slightly while Divergence and IPO Zeal both fell. The net effect was no change in our overall risk profile for the securities markets. We are nearly a full year from the market lows of 2009. Some of the data we collect is influenced by that watershed of early March. For instance, even with the market weakness recently we are seeing about 35 companies trading at new 12 month lows every week out of over 6400 stocks. It speaks to exactly how depressed the markets were last March.
We are seeing a bit more differentiation between business sectors recently. Consumer spending has kept the consumer staples and consumer discretionary sectors relatively strong. Financials and Utilities remain weaker and near their 26 week moving average price. This is true on an international basis as well as with the domestic U.S. markets. Our precious Metals ETF position remains near its moving average price as well and off its highs of last November.
Our income portfolios did well in 2009 after recovering from the panic selling. These portfolios have remained relatively flat in recent weeks with the exception of the longer duration bond funds we watch. Those have shown mild weakness since the first of the year. While it’s too soon to redeploy our reserves of cash, we continue to watch for opportunities to do so.
The U.S. Dollar has shown stability and some mild appreciation in recent weeks. European currencies generally have been weaker against the dollar while Asia and Latin America have remained nearly unchanged against the USD. This graphic shows the latest 90 days of relative movement.
Note that the U.S. Dollar has shown good relative strength over this period. The opposite was true for the first half of 2009.
