The uptrend for bonds peaked in early 2021. The trend for stocks did so a year later. Commodities peaked in June and over the past few months the trend has been slowly (an unevenly rolling over).
More Context: It could always reverse higher, but the commodity trend has fallen two weeks in a row and is down in 6 of the past 10 weeks. As the summer peak in commodities moves further into the rear-view mirror, it looks increasingly like all three of the major asset classes are now in downtrends. This leaves investors with fewer places of refuge as the most challenging year in a generation grinds to a close. Business cycle history suggests that the next important turn in trend will be bonds turning higher (and bond yields turning lower). It hasn’t happened yet (despite the recent drop in bond yields) but our long-term trend indicators suggest bonds are closer to turning higher than stocks (and bonds are trending higher relative to stocks). While the pattern is not set in stone, equities have not made the case that this time will be different.
We take a Deeper Look at a week of fumbled opportunities and areas of interest in an environment where equity market uptrends are hard to find.
