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Market Watch Weekly | August 27, 2021 | "This Is What It Sounds Like, When Doves Cry," Jerome Powell (but not really)

Erik Dekker - Aug 27, 2021

North American benchmarks generally cooperated during our 3-week hiatus with markets hitting a trifecta of all-time-highs on Friday. It’s odd in that despite these major equity benchmarks trading in record territory, the underlying components of the market don’t feel like it. If you were looking at the market action last week, it felt like a move lower was coming, only to be stabilized and bounce this week. The breadth of the market hasn’t made much progress in either direction, and our key tactical indicators are ending the week roughly where they began – with no strong messaging. The market moves have been sharp, but brief, and there really isn’t a high-conviction action to be taken. What we mean by all this is that the areas of strength have been very narrow. Since Spring of this year, gains have been seen in a small number of sectors and select mega-cap names (think the $2-trillion club like Apple, Microsoft, Google) which have been driving the headline benchmark numbers higher. Even the relationship between the Russell 1000 Growth and Value Indices have been stuck in neutral, despite feeling like there is a big rotation under way.

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