📈 Major U.S. Index Performance and Analysis

📊 Weekly Market Gains Overview

• S&P 500: +5.33%

• Nasdaq Composite: +7.21%

• Dow Jones Industrial Average: +3.5%

• Russell 2000: +4.51%

U.S. equity markets experienced a remarkable surge last week. The Nasdaq led the way, driven by a powerful rebound in technology stocks. Both the S&P 500 and the Dow also showcased solid performances, reflecting growing investor optimism.

🔍 Key Drivers of the Rally

Easing Trade Tensions

One major contributor to this market upswing was the easing U.S.-China trade tensions. A 90-day reduction in reciprocal tariffs significantly boosted market sentiment. Investors reacted positively, expecting improved trade dynamics.

Encouraging Inflation Data

Additionally, inflation data provided a silver lining. Consumer prices rose only 2.3% year-over-year, while producer prices actually declined. This signals easing inflationary pressures, reassuring investors.

Technical Breakouts

The S&P 500 broke above its 200-day moving average. This technical breakout attracted momentum-driven investors eager to capitalize on the market's upward trend.

Technology Sector Strength

Prominent technology companies such as Nvidia and AMD rallied sharply. Their gains were fueled by enthusiasm surrounding artificial intelligence and improved trade relations.

⚠️ Economic and Market Considerations

Despite these positive developments, consumer confidence has dropped to near-record lows. This downward trend suggests that many households may limit spending as costs rise. A reduction in demand could dampen inflationary impacts from new tariffs and higher input prices.

Tariffs usually drive prices up; however, businesses may struggle to pass these costs on to cautious consumers. This dynamic could help keep overall inflation in check, despite persistent supply-side pressures.

📈 Equity Model Analysis

Weekly Return Prediction

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

Fed Funds Rate Influence

The Fed Funds Rate Sub-Model remained Bearish. However, a combination of Advisor Opinion, NYSE Advance/Decline, Up-Volume, and Down-Volume sub-models sustained a Bullish outlook.

Primary Drivers

This week's model posture was driven primarily by technical, momentum, and valuation factors. In contrast, economic, monetary, and sentiment inputs had relatively lower influences.

💵 Bond Model Analysis

The Bond Model continues to favor Long Duration High Yield Bonds. This is supported by positive credit momentum and a strong inclination toward high-yield credit quality.

Credit Momentum and Probability

Credit momentum remains in positive territory. However, credit probability slightly decreased from 64.4% to 63.8%. Investment Grade probability fell from 19.0% to 18.2%, while Treasuries held at 18.0%. Both Duration Probability and Duration Momentum continue to support a Long Duration positioning.

We will monitor market conditions and model shifts closely. Stay tuned for next week’s update.

Rising Dividends SMA: Key Insights

WBI’s Power Factor Growth & Quality SMA is experiencing impressive gains, up 4.01% YTD net of fees through May 16th. This return exceeds the S&P 500’s 1.81% gain. The portfolio is accessible on various platforms, including Cetera MAA, Osaic WMP, Envestnet, and SMArtX.

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Stay informed with the latest updates by following our research and analysis into market trends.

Portfolio for Uncertainty

PFGQ Tearsheet.pdf

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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.

PARD Tearsheet.pdf

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