Gibraltar Asset Management

Market Commentary September 2023

4th September 2023

August has seen the unwinding of the seven-month rally in technology and digital stocks that, to varying degrees, lifted equities across most sectors this year. Stocks often struggle in the summer; but usually that means they are lethargic, not heading notably lower. What caused stocks to give up big parts of their year-to-date gains? AI mania drove much of the stock rally in the first half of the year. And in any stock-market mania, unbridled enthusiasm gives way to second-guessing at some point. Consumers and businesses show few signs of spending fatigue, contributing to inflation’s persistence. We think the difficulty in getting inflation down to the 2% target level, along with some buyers’ remorse on AI mania, has prompted investors to take profits.

Market Commentary August 2023

14th August 2023

Data on NYSE margin debt (borrowed funds from brokerage firms) has been an excellent indicator confirming bull and bear markets. It is based on monthly data, so there is a time lag, but it is impossible to catch the top or the bottom in any case. Margin debt bottomed at the end of 2022 and has crossed above its 10-month average for an intermediate-term to long-term buy signal. This reverses the sell signal from late 2021 (when its uptrend broke) and a confirming signal when it broke the 10-month at the end of January 2022. Prior buy signals for the S&P 500 were given in June 2020, July 2016, September 2012, July 2009, April 2003, May 1995, May 1991, December 1982, and June 1975. These were all good signals. Sell signals were produced in October 2018, August 2015, July 2011, Sept. 2007, October 2000, November 1987, November 1981, and April 1973. These were good as well, but the reading was late for the 1987 crash.

Market Commentary July 2023

12th July 2023

Just like that, 2023 has reached the half-year mark. As the years pile up, each passing year seems to compress into a tighter timeframe, and 2022 feels like it was six weeks not six months ago; but that is a discussion for another time. The outlook at mid-year 2023 is certainly an improvement over that of mid-year 2022, when inflation was near 40-year highs and rising, the supply-chain crisis was raging, and the central banks were just getting started on their aggressive rate-hiking policies. The war in Ukraine was just a few months old, and China was still in its zero-tolerance phase of COVID-19 lockdowns. As July 2023 gets underway, the major central banks have largely completed their rate-hiking campaigns. The annual rate of change in inflation is about half the peak level reported in June 2022. Supply chains now appear to be normalizing. China has reopened; and Russia is surrendering ground in Ukraine.

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Market Commentary September 2023

Market Commentary August 2023

Market Commentary July 2023