Market Risk Report as of November 8, 2021

Tom Veale
November 8, 2021

From Chief Investment Officer Tom Veale,

“Last week’s markets and closes were dramatically optimistic. Continued excellent earnings reports have helped propel the market indexes to a near-unending string of new all time highs. As a counterpoint to all that good feeling news I might suggest the earnings are possibly in a reversion rather than a surge.

The SignalPoint Market Risk Indicator (MRI) continues to tread the same path in general this week with two components remaining stubborn and well above median value. The other two are much closer to their normal values. This is how the MRI is looking as of 11/08/2021:

The Value Line Price/Earnings ratio has been relatively steady now since mid-September, 2021 and short term interest rates remain very low. Troubling CPI Inflation data has yet to trigger a change in FED policy relative to Treasury yields. This has been one of the contributing factors keeping the MRI above its median value.

Rising prices of stocks and funds has encouraged some further profit capture in SignalPoint’s equity growth strategies. Cash held in reserve for market risk events continues to pace equity price growth.

Best regards,
Tom Veale

The MRI’s showing 35 this week off one point from last week. The MRI Oscillator is +2 indicating only mild upward risk pressure currently. The Relative Valuation and IPO/New Issues Indexes both remain bearish at this point. Some encouragement can be seen in the number of IPO/New Issue applications being withdrawn, however.

Maybe the SPAC/New Issues/IPO party is finally winding down.”

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