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Markets Drop to Start the New Year: Market Commentary from Cabana’s CEO – January 4, 2021

3 years ago

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I hope all our investment and advisor partners had a wonderful holiday week spent with family and loved ones. It is all that really matters at the end of the day. I also hope each of you are healthy, as are as those that you care about. That cannot be emphasized enough these days.

U.S. equity markets took a well-deserved drop between 1 and 2% today to start the new year. The climb from the late October lows has been nothing short of remarkable and given the ever more obvious pandemic realities, we are due for a pullback. The end of this nightmare is in sight, but you may need binoculars to see it. I am not a logistics or medical expert, but it is very clear that this country needs a major collaborative effort to get these vaccines administered. If we can cross the English Channel under cover of night and take the beaches at Normandy, and twenty years later put a man on the moon… we can do this. The longer it takes for this to come into focus, the more likely everyone reading this is to be impacted, health wise or financially.

I expect the market to remain volatile for the next few days as we sort through some continuing political strife surrounding Georgia’s Senate races and the certification of electoral votes in Congress. I am a big believer that markets are all knowing and are concerned with only one thing, which is the relative prospect of corporate earnings. The politics themselves are irrelevant. It is the results of the politics that matter. As such, we seem likely to test the major indices’ 50-day moving average at 3600 (S&P 500), before we can move higher. This country remains poised for growth, but we may have some rocky times ahead if we don’t begin treating this pandemic like the war that it is.

Happy New Year! Let it be the best one ever! At Cabana, we remain in our Bullish Scene.

Download a PDF of this commentary at the link below:

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January 17, 2024

This material is prepared by Cabana LLC, dba Cabana Asset Management and/or its affiliates (together “Cabana”) for informational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. This material may only be distributed in its original format and may not be altered or reproduced without the prior written consent of Cabana. The opinions expressed reflect the judgement of the author, are as of the date of its publication and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by Cabana to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Cabana, its officers, employees or agents.  

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Commonly used index/benchmark definitions:  

All indices and categories are unmanaged and an individual cannot invest directly in an index or category. Index returns do not include fees or expenses. Benchmark indices will likely materially differ from Cabana’s portfolio strategies. Detailed information as to how the returns are calculated can be obtained online from the following link: https://thecabanagroup.com/disclaimers/performance-reporting-methodology/. 

Morningstar’s Moderate Target Risk index  follows a moderate equity risk preference and is based on well-established asset allocation methodology from Ibbotson Associates, a Morningstar company.  

Morningstar’s Tactical Allocation category includes portfolios that seek to provide capital appreciation and income by actively shifting allocations across investments. These portfolios have material shifts across equity regions, and bond sectors on a frequent basis. 

The S&P 500 Index is a market-capitalization weighted stock market index of 500 widely held large-cap stocks often used as a proxy for the U.S. stock market.  

The Russell 2000 and 3000 indices are market-capitalization weighted stock market indices that include, respectively, 2000 and 3000 of the most widely-held stocks and are often used as proxies for the U.S. stock market. 

The Nasdaq Composite Index is a market-weight capitalization index that covers more than 3,000 stocks listed on the Nasdaq Stock Market. What is the Nasdaq Composite, and What Companies are in It? | Nasdaq