The key highlights for the month
This month showed more encouraging signs of inflation easing further. CPI and PPI numbers came in lower than the market expected while PCE inflation figures fell in line. Meanwhile, labor data still exhibits a healthy number although consumer spending seems to have relented in May. These alleviated sticky high-rate fears that permeated the market towards the end of last month and bolstered hopes for rate cuts this year. Currently, the odds are leaning towards two-quarter percent cuts, one in September and the other in December. These boosted the equity markets, albeit unevenly, as well as bonds.
Asset Class & Sector Performance Snapshot for the Month
The broad equity market index such as the S&P 500 had a good run this month but the distribution is far from even. If we drill down into sectors and capitalization, there is a large degree of dispersion. Large-cap names and cyclical sectors such as technology, communications, and discretionary are the top drivers this month. Meanwhile, small caps, most of the defensive sectors (staples, utilities) as well as commodity linked sectors (energy, materials) are down. Gold and general commodities as asset classes are also down slightly for the month.
Portfolio Updates
The AQ multi-strategy model portfolio was up 1.3% this month. All the underlying strategies made profits. The model’s asset picks in the S&P 500 and REITs did well while Gold was flat. Meanwhile, the sector picks showed a wider dispersion in their performance. For the month, the model held the top 2 sectors - technology and discretionary. However, it is also vested in the worst sector utilities. All in all, it was still a gain for the strategy. The volatility trading strategy contributed the smallest gains this month as it trimmed all its positions which were sitting on profits intra-month in the midst of heightening uncertainties.
Overall, the AQ multi-strategy model is up +1.3% for June 2024 and up +7.8% YTD.
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* This is the model performance of portfolios constructed using more advanced strategies than those taught in our courses. Note that live performance may vary due to execution price slippages, the difference in sizing precisions, etc. All performances are measured in USD terms.
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