Most investors seem aware of the numerous negative factors: restrictive monetary policy with several 0.50% interest rate increases by the Federal Reserve Board (FRB) starting next month, mortgage rates now up to 5.25% reducing the affordability of new housing, numerous supply shortages worsened by shutdowns in China, and the war in Ukraine.
From a positive perspective, there are signs that many investors may already be too cautious. The Bank of America monthly survey of global institutional fund managers indicates they increased their cash positions to 5.9% in March.
From a technical perspective, as recently as April 20th some Lowry’s indicators, mostly short-term, had improved enough to provide reasons for incremental optimism. However, that optimism was quickly reversed by a new intermediate trend sell signal thanks to the substantial decline on April 21st.
Our April 2022 market commentary provided by Derwood S. Chase Jr. Founder & Chairman Emeritus, Chase Investment Counsel.