The S&P 500 is on track to close slightly higher in this shortened holiday trading week. However, two of our proprietary technical indicators were notably unable to gain traction.
MACROECONOMIC UPDATE
- The latest Consumer Confidence report revealed further deterioration in consumer attitudes as the Overall Index fell by 3.8 points to 89.1, while the Present Situation Index plunged 9.5 points to 116.8 – its lowest reading in nearly 5 years. The Future Expectations Index was unchanged at 70.7 as it remained below the Conference Board’s recession warning level of 80 for the 11th consecutive month. Read our latest Market Insight for more on this release.
TECHNICAL UPDATE
- InvesTech’s Housing [Bubble] Bellwether Barometer fell back below its key “Warning!” support level this week as mortgage rates remained firmly entrenched above 6%. If this Indicator continues its downward trend, it would signal trouble ahead for the housing market and overall economy.
- InvesTech’s Artificial Intelligence Index also moved lower this week and is still more than -15% below its peak reached in early November. If weakness in these speculative AI-related stocks continues, it will mark an important shift in investor psychology surrounding the AI hype that has fueled stock market sentiment.
InvesTech Model Fund Portfolio
There are no changes in the Model Fund Portfolio this week which has a net invested equity allocation of 53%. This is comprised of 58% long positions, 5% in an inverse index ETF, 5% in an intermediate Treasury ETF, and 32% cash held in short-term Treasurys or a money market fund.