Markets Review

Let’s do a quick review of the markets over the past three months. GOVT bottomed at $23.25 on June 14. VT bottomed at $82.75 on July 14. IAU bottomed at $32.20 on July 20. CPER bottomed at $19.11 on July 15.

The high water mark over this period for GOVT was $24.40 on April 26. VT $100.54 on April 21. IAU $37.14 on April 21. CPER $28.66 on April 21.

The concentration of highs at the beginning of the three month period and lows nearer the end reflects the generally bearish action across asset classes due mostly to the appreciation of the unit we’re pricing them in, the USD.

As we’ve discussed previously, Financology’s outlook is that the lows for everything except Treasuries are likely to be exceeded in the coming months, although the downtrend in gold may be nearly exhausted.

GOVT is iShares broad Treasury fund and is representative of the UST market, including everything from 1-30 years weighed by market cap. Because Treasury issuance has been more heavily weighted at shorter maturities, the fund is relatively mild in terms of price volatility and can be held in relatively large positions. VT is Vanguard’s broad equity fund, holding nearly ten thousand stocks from around the world in market weights, and closely represents the common stock asset class. IAU is the iShares gold fund and closely tracks yellow metal spot prices. CPER tracks copper via the futures market and roughly tracks red metal spot prices.

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