Gibraltar Asset Management

Market Commentary March 2023

6th March 2023

Bullish sentiment in the stock market can occur during both a bear market and a bull market. When we are in a bear market, sentiment gets bullish during counter-trend rallies, only to see new lows ahead. However, during the initial stages of a bull market, sentiment will also get bullish. To those who don’t analyse history, this is assumed to be a bad thing that is likely to doom the rally. One could argue though that we are at that point in the cycle right now. There are plenty of technical indications that stocks have transitioned into a bull market, whether it’s price action, the chart structures of certain major indices, or market breadth. At the initiation stage of a bull market, we need investors to turn more positive and start getting back into stocks. We have had some of that lately, yet we think part of the rally was short-covering as there was a lot of pessimism at the end of 2022. Now that the shorts have covered, that fuel is gone. If the market can hold on and grind higher, it would be a great sign that the stock market has indeed turned the corner.

Market Commentary February 2023

6th February 2023

The stock market in 2023 is simply a different animal than it was in 2022. All the major indexes are up, risk-on is back, and growth stocks are leading the way. Happy days are here again, right? Not so fast. The market has had a strong January, but stocks also rose sharply in October and November 2022 - before face-planting in December. Recession risks are clearly present and may be rising, as evidenced by the GDP & corporate earnings figures. Stocks in January appear to have risen on a valuation bounce and on hopes, if not expectations, that central banks will begin to reverse course sometime in 2023. While year-to-date stock gains may prove to be a house of cards, for now investors are happy to see green on the screen.

Market Commentary January 2023

9th January 2023

We wish all our clients and readers a very Happy New Year. The FTSE 100 has seen heightened volatility as of late - falling 5% in September, before rising 3% in October and a further 7% in November. Those monthly moves up and down are substantially larger than typical monthly changes in the 1%-2% or lower range, and signal a developing battle between bulls and bears. Bulls want to believe that the rise in inflation is moderating, and that central banks will take their foot off the gas as pricing pressures ease. Bears believe past central bank actions as well as inflation’s dampening effect on consumer discretionary spending will push the economy into recession in 2023. Our view is that the stock market should continue to grind higher over the course of the year. However, it could be a bumpy ride and investors need to get used to such volatility.

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Market Commentary March 2023

Market Commentary February 2023

Market Commentary January 2023