This Ratio Screams Risk On
October 10, 2023
Despite lower lows for the S&P 500 in the last two months, we’re seeing higher highs from discretionary vs staples ratios.
This is true on both an equal-weight and cap-weighted basis.
Seeing these ratios make new 52-week highs indicates offensive positioning by investors and supports higher prices for risk assets.
We don’t foresee the stock market coming under increased pressure as long as these ratios remain strong.
As always, we love to hear from you, so shoot us a note and let us know what you think.
Alfonso