Market Risk Report as of April 10, 2023

From Chief Investment Officer Tom Veale,

If headlines are indicative of investor sentiment and not the authors’ leanings then we should be concerned. Those reading financial papers and watching such news have seen significant negativity in recent reporting. Will we have a recession? Will earnings go negative? Or will we see a flat period of zero earnings ‘growth’ but continued earnings, none the less? Our SignalPoint Market Risk Indicator is mostly unchanged for 2023 so far with risk levels above median and now right at the “Caution” threshold.

Stock valuations continue to be troublesome relative to inflation and short term treasury rates. We see only modest speculation in stocks and consensus about market direction is only just above its median value. The contraction in the number of issues being traded on the NASDAQ and NYSE continues to slowly concentrate available investment dollars in more established companies of more visible fundamental value. It feels more like a rotation than a market correction at this point.

Market indexes have been bouncy but essentially unchanged for around 12 months now. This is not unusual after periods of extreme IPO/New Issues surges like we experienced in late 2020 and much of 2021. It remains to be realized just where the markets will next turn. More consolidation and rotation seems to be the path right now.

Best regards,

Tom Veale

The MRI remains at 32 this week but is showing some upward risk pressure from the MRI Oscillator (+3). Relative Valuation remains cautious while shrinking issues being traded if favorable. Speculation and Divergence remain market neutral as of this week.

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