The Fed cut rates at its October meeting this week but rained on investors’ parade as they warned that further rate cuts this year are far from guaranteed.
MACROECONOMIC UPDATE
- Consumer Confidence from the Conference Board fell 1 point from 94.6. A slight increase in the Present Situation Index was offset by a 2.9-point decline in the Future Expectations Index. The Future Expectations Index now sits at 71.5, still well below the Conference Board’s Recession Warning level of 80.
- Pending Home Sales for existing homes were flat in the latest release as a slight decline in mortgage rates failed to spur demand in the sluggish housing market.
TECHNICAL UPDATE
- Market Breadth deteriorated this week, and the Nasdaq sent up a warning flag on Wednesday when it recorded its worst breadth on record while hitting a new all-time high (see Market Insight).
- Our Negative Leadership Composite is at a neutral reading. However, key component data reveals that leadership may be starting to deteriorate, and bearish Distribution could reemerge in the coming weeks. This would be a crucial confirmation that leadership is also worsening alongside breadth.
InvesTech Model Fund Portfolio
The Model Fund Portfolio is now 55% invested in quality equity ETFs, 5% in an intermediate Treasury ETF, and 40% cash. The cash portion of the Portfolio (40%) is held in short-term Treasurys or a money market fund to provide an attractive yield and defensive buffer.