From Chief Investment Officer Tom Veale,
“Is the market in a “bottoming” process or is it just hesitating before a September – October plunge? Our SignalPoint Market Risk Indicator (MRI) shows three components easing in their evaluation of market conditions with one remaining unchanged. Overall, the MRI is in its neutral range and not too high compared to the Median value.
While certainly not “bargain basement” level, the markets seem to be sorting themselves out from their over-valued levels seen in 2021. The many excesses seen last year are individually being addressed by market participants. New Issues and SPACs have all but disappeared and the number of issues traded weekly is dropping slightly. Market speculation as we measure it is at the low end of its normal range. The rising interest rate environment has had a downward pressure on market Price to Earnings ratio. That last item might still require further adjustment.
In the meantime, those with cash savings are being given some better yield. The 13-week Treasury Coupon Rate rose above 3%/yr last week for the first time since January of 2008! Unfortunately, longer maturities are not yet rising much and the yield curve is rather flat. Yields still trail the inflation rate but the distance is narrowing.
For the SignalPoint Investment Strategies cash held in reserve is currently appropriate for what appears to be a market bottoming experience. We continue to search for proper market segments and prices that would appear to be worthy of consideration for the future.”