Market Musings 140924: Buy the Breakouts

Market Musings 140924: Buy the Breakouts
Podcast this week: (click on link below)Our Investment Strategy for September 2024 (podcast)Link to report and video:Investment Strategy Focus September 2024 (video and report)
Summary:
In a stock market which is consolidating during the seasonally weakest month of the year, buy segments that are breaking out to new highs and thus showing relative strength.

1. Short- and long-term interest rates have declined sharply since MayThe move lower in interest rates has been most dramatic in the US, but has been mirrored in the eurozone and UK as inflation rates have returned to or close to the central banks’ target of 2%. Major central banks around the world (except in Japan) should cut benchmark interest rates this year and next.

US 10-year bond yield falls from 4.7% to 3.7%

2. The reset in interest rate expectations in the US has weakened the US dollar against other major currenciesThe euro, pound sterling and Japanese yen have all strengthened against the US dollar since June