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John Serrapere publishes a weekly newsletter which includes in-depth research, charts & graphs and insights into current and past markets. Click the below links to view a preview of what the weekly inFocus newsletter has to offer. To view this week's entire newsletter as well as all past newsletters, you must create an account. 

Highlights

Inflation Risk Dominates
November 9, 2021
This week, three alternative versions of the S&P 500 Index (SPX) are InFocus: the traditional capitalization (Cap)-weighted SPX, the equal-weighted, and the reverse-cap-weighted version.

Volatility Will Rise
September 21, 2021
For the rest of 2021 and beyond, markets are going to be very volatile. The Fed is going to make money worth less. How do we hedge? When stocks are at a reasonable value, they are a hedge against high inflation.

The FED Is Complacent or Clueless on Inflation Risk!
February 18, 2021
Arrow Insights favors global assets, moderate risk asset allocations and managed futures. Our investment rationale is based upon sustained weakness in the U.S. Dollar ($USD) attributable to yield repression policies enforced by the U.S. Federal Reserve (Fed) and excessive money supply growth due to money printing.


InFocus

Economic-Market Cycles, Equity & Global Macro Models
November 15, 2022

Normal is nebulous. The 2000-2019 Normal was much worse than the 20th Century Normal! 

Introduction

Arrow Insights (A.I.) conducts research for the weekly InFocus. A.I. reviews economic and market factors relevant to specific financial markets. Each InFocus reviews asset classes and index performance within an asset allocation context. The primary or secondary objectives are hedging Inflation, deflation, or both. Each InFocus reviews a portfolio strategy model or index relevant to this process.

Managed Futures Funds, Global Allocations, and Equity Sectors Are InFocus:

Figures 1-2 compare Dunn Capital Managed Futures Composite (DWMA) performance to significant asset classes year-to-date 2022 and over the last 30 months through Nov 11, 2022. DWMA outperformed all indices and strategies with total returns of 57.8% (YTD 2022) in Figure 1, while only the Bloomberg Commodity Index bested DWMA over the past 30 months (Figure 2).

Figures 1 and 2 capture a time of high return dispersion with “best return to worst return spreads” of 73.1% and 120.9%. Why? The U.S Federal Reserve Bank (Fed) moved from a highly accommodative to a very restrictive monetary policy accompanied by rapid hikes in the Fed Funds Rate (FF) as the U.S. GDP swung from the most robust economy since 1984 at 5.7% (year-over-year, YOY) through 2021 to about -1% YOY in 2022 Q3. 

 

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