the market halted its rebound that started from May 20th as Friday’s strong job report suggests that the labor market — and in turn the US economy is as strong as we’ve seen in years. in other words, a report that’s better than merely good could prompt the Fed to be even more aggressive in the coming months. In short, good news is bad news for the market at this time. Moreover, Elon Musk’s super bad feeling about economy along with Jimmy Dimon’s warning for an economy hurricane that even made the picture gloomier. We don’t really know what top execs are seeing that others are missing. But the worst may not be over for the market as the inflation, the Ukraine war and the pandemic that are stressing global energy markets and supply chain still go on.
Technically, the market has already dropped two legs as far as the current rebound occurs, while the SPX is struggling around 4177 which is its 0.382 retracement. However, the decreasing volume on Fridays’ decline indicated that the selling pressure was not as heavy as to be a distribution, if the market could hold well above 4073, the rally is still possible to test its 50MA before the market drops the third, and hopefully the last leg to bottoming out.
The S&P 500 closed the month of May essentially unchanged. While our Long-term investment portfolio slightly dropped -1.99% for the May made its total return to 47.28% since the inception, May 2020( click for our latest portfolio performance report). our Dynamic investment portfolio that dropped -2.45% made its total return to 6.22% since May 2020. Following by BTC’s more than 60% of decline, investors are experiencing another crypto winter, as a result, our crypto portfolio which allocates with 50% of BTC and 50% of ETH got a -43.45% of total return since the launched date (03/31/2021). Different from these portfolios, the loss/gain for the structured notes portfolio is based on current market value of its underlining assets. The actual notes’ return will be reflected by its underlying assets’ value on its maturity date, since the most of notes in this portfolio mature in 3-5 years as well as each of those come with different terms (duration, buffer/barriers, and the final value of underlining assets etc.), at this point, the market volatilities would have less impacts to the structured investments actual return until the last day. In contrast to the extreme volatile crypto investments, over 20% of structured investment portfolio have exited that received an averaged 17% of return by the end of May.
With the anticipation of a recession and mounting rumors of more rate increases by year-end, its critical to be prepared respond to periods of downturn by adjusting the investment portfolio holdings during the bear market rally and, most importantly make it stick to the long-term investment objectives.
Sen Zhang
Managing Partner
Corrigit Capital Group