Market Analysis

August 10, 2018
Blog Market Analysis Bull or Bear Speculate and Adjust

trade fed

Facts weekly ending oct 4 in billions (change/total (impact on reserve yearly %)): - reserves: -154146 (-19%) - bills 0/.1 (0%) - notes and bonds -82200 (-10%) - mortgage backed MBS -71700 (-8.7%)

Conclustions - Lend money, Do not borrow => long term interest rates are artificially high => buy bonds, dividents, corporate bonds => cash becomming scarce and king - Neutral on borrowing short term (bills) => - Lend mortgage, do not buy house with mortgage => mortgage rates are artifically high => buy MBS etf - buy bonds

Macro watch

*- fed balance sheet (active intervention) *- yield curves (20-2 spread): money creation and flow (now: almost zero) *- corporate bond minus treasury spread - export/import - gdp growth/inflation/unemployment - currency - stock market yield

Market Sentiment: Speculate and Adjust

We call the current market sentiment Speculate and Adjust. After each earning season, investors start speculating about the future of the tech stocks and keep betting on which ones will run faster. During the earning calls, adjustments happen: those who could not live up to the expectations fall back to the previous quarter prices (Ex: Twitter and Facebook) but those that surpass expectations will jump (Ex: Amazon and Alphabet and Apple). It is the tech sector that continues to grow while pulling the rest of the economy.

inVisement thinks the current market is healthy, growing, and cautions. We keep our positions while slowly adding to our cash reserves.

inVisement Position: Hold

inVisement portfolio consists of

inVisement is bullish and aiming at 25% return of its portfolio for 2018:

Total Expected Return = (15%+10%) * 60% + 40% * 25% + 0% * 15% = 25%

Please check out inVisement Portfolio for more info.