As the weight of the evidence has shifted from bullish to neutral in the first half of 2021, active investors can find more solace in moving to the sidelines and holding on to a little more cash. This week may have intensified that feeling. Commodities suddenly seem bidless, the S&P 500 has moved from an all-time high to testing its 50-day average over the course of a week, and bonds sold off then reversed course, sending the yield on the 10-year T-Note to its lowest level since early March. Dramatic moves across stocks, bonds and commodities this week can obscure the trends that have emerged over the past six months. Commodities & stocks have been strong and bonds have been weak. That may very well change as we move into the second half, but let’s not overlook the path that has gotten us to where we are this year. So with just a handful of trading sessions to go in the first half, we still have the broad commodity ETF up 27% YTD, with SPY still carrying a double-digit gain and AGG still in negative territory.
