Weekly News 5/19/24

Matt Schreiber
May 23
3 min read

📈 Major U.S. Index Performance (Week Ending May 16th)

• S&P 500: +5.33%

• Nasdaq Composite: +7.21%

• Dow Jones Industrial Average: +3.5%

• Russell 2000: +4.51%

U.S. equity markets surged last week, with the Nasdaq leading gains on the back of a strong rebound in technology stocks. The S&P 500 and Dow also posted solid performances, reflecting broad-based investor optimism.

🔍 Key Drivers of the Rally

• Easing U.S.-China Trade Tensions: A 90-day reduction in reciprocal tariffs helped boost market sentiment.

• Encouraging Inflation Data: Consumer prices rose just 2.3% year-over-year, and producer prices declined, signaling easing inflationary pressure.

• Technical Breakouts: The S&P 500 broke above its 200-day moving average, attracting momentum-driven investors.

• Technology Strength: Companies like Nvidia and AMD rallied sharply, supported by AI enthusiasm and improving trade dynamics.

⚠️ Economic and Market Considerations

Consumer confidence dropped to near-record lows, suggesting many households may cut back on spending as costs rise. This pullback in demand could dampen the inflationary impact of new tariffs and rising input prices. While tariffs typically drive costs higher, businesses may find it difficult to pass those costs on to increasingly cautious consumers—helping keep overall inflation in check despite persistent supply-side pressures.

Source: YCharts

📊 Weekly Trend Switch Research Report

Date: May 19, 2025

🧠 Summary of Model Updates

Equity Model: Low Risk | Bull Ambient Risk Condition
Bond Model: Long Duration | High Yield

📈 Equity Model Analysis

The Trend Switch Equity Model prediction held steady at -0.6%, maintaining its “Risk On”, Low Risk position. The Ambient Risk Condition remained Bullish, supported by continued strength in internal market indicators.

Key Observations:

Weekly Return Prediction: Unchanged at -0.6%, indicating no shift in the model’s Low Risk signal.
Fed Funds Rate Influence: The Fed Funds Rate Sub-Model remained Bearish, but a combination of Advisor Opinion, NYSE Advance/Decline, Up-Volume, and Down-Volume sub-models sustained a Bullish Ambient Risk outlook.
Primary Drivers: Technical, momentum, and valuation factors led this week’s model posture, while economic, monetary, and sentiment inputs had lower relative influence.

💵 Bond Model Analysis

The Bond Model continued to recommend Long Duration High Yield Bonds, supported by positive credit momentum and a strong probability tilt toward high-yield credit quality. Credit momentum held firm in positive territory, while credit probability remained most favorable for High Yield, despite a slight dip from 64.4% to 63.8%. Investment Grade probability declined from 19.0% to 18.2%, and Treasuries remained the least favored at 18.0%. Additionally, both Duration Probability and Duration Momentum continued to support a Long Duration positioning.

We’ll continue monitoring market conditions and model shifts closely. Stay tuned for next week’s update.

Source: WBI

Rising Dividends SMA: Download Report

Portfolio for Uncertainty

WBI’s Power Factor Growth & Quality SMA is up 4.01% YTD net of fees through May 16th, ahead of the S&P 500’s 1.81% return. It’s available on WBI’s platform, Cetera MAA, Osaic WMP, Envestnet, and SMArtX.

Rising Dividends Outperform

WBI Power Factor All Cap Rising Dividends SMA is up 5.59% YTD net of fees through May 16th, ahead of the S&P 500’s 1.81% return. It’s available on WBI’s platform, Cetera MAA, Osaic WMP, Envestnet, and SMArtX.

HUGE Model Marketplace

Portfolios are machine-optimized using the Capital Power Ratio™ to maximize upside and limit downside, aligning with client risk and return goals. With 1,000+ models, advisors can quickly build tailored portfolios and save hours daily.

Learn More