The performance of US Small Cap Stocks faced challenges throughout 2023, with the iShares Russell 2000 ETF ($iShares Russell 2000 ETF(IWM)$) lagging the S&P 500 Index ($S&P 500(.SPX)$), returning a modest 12.95% compared to the S&P's 22.48%. This underperformance was primarily influenced by the dominance of mega-cap names, notably "The Magnificent Seven," which experienced substantial growth amidst significant advancements in AI. However, recent signals from the US Federal Reserve suggest a shift towards a more dovish policy in 2024, aligning with easing inflation trends and approaching the long-term target of 2.5%. This shift is expected to stimulate a broader market rally, fostering increased

In the ever-evolving landscape of technology, $Microsoft(MSFT)$ stands as a beacon of innovation, recently reaching an all-time high on the wings of AI growth, formidable financial prowess, and an indomitable presence in cloud computing. This article provides a detailed examination of Microsoft's recent achievements, strategic initiatives, and an in-depth valuation analysis. AI at the Heart of Growth: At the OpenAI DevDay Conference on November 6, 2023, Microsoft's CEO Satya Nadella delivered a resounding commitment to the development of superior systems, amplifying model development for developers. The conference unveiled a suite of cutting-edge AI models, including the highly anticipated GPT-4 Turbo, GPT-3.5 Turbo, DALL-E 3, and Whisper 3. Notab

In light of the Federal Reserve's adoption of a hawkish monetary policy, the investment landscape has witnessed a retreat from long-dated assets such as US treasuries, resulting in a notable decline in bond prices. The current 4.5% yield on 10-year Treasury bonds raises the pertinent question of whether this presents an attractive opportunity to engage in fixed-income instruments and money market funds focused on US treasuries. However, the appropriateness of this investment strategy is contingent upon individual risk appetites. For investors, particularly those with a high-risk tolerance like myself, the allure of investing purely in US treasuries for cash management must be scrutinized in light of its limited potential for attractive long-term returns. Instead, the enduring appeal of equ

The pullback has begun. Yesterday, a federal Reserve Chairman Jerome Powell said that the Fed "is not confident it has done enough to achieve its stance of 2% inflation", sending a warning traders betting on rate cuts in 2024. Furthermore, yesterday's Treasury auction of 30 year bonds went poorly, indicating that investors are reluctant to own long-dated government securities. Investors were awarded 4.769% yield 30 year Treasuries, 0.0051 percentage points higher than the yield in pre-auction trading. This led to a sell off in US Treasuries, with yields moving higher. Conversely, the $SPDR S&P 500 ETF Trust(SPY)$ and the $Invesco QQQ Trust-ETF(QQQ)$ 

 Stocks have demonstrated remarkable resilience, particularly as the United States ushers in a seasonally robust phase of the year. The $S&P 500(.SPX)$, has rebounded by more than 6% since late October, primarily propelled by the prevailing conjecture that the Federal Reserve has concluded its course of interest rate hikes. Simultaneously, the yields on 10-year US Treasury bonds have retreated from their zenith of 5%, as discerning investors endeavour to secure favourable yields while contemplating the possibility of a termination of rate increases on the horizon. These dynamics have set the stage for the $Invesco QQQ Trust-ETF(QQQ)$, a representation of the Nasdaq-100, to undergo a brief retracem

Fear has once again instilled a sense of apprehension within the financial markets due to recent macroeconomic developments, thereby reigniting concerns of an impending economic downturn. The $S&P 500(.SPX)$ has experienced a decline of more than 10% from its peak in July, thereby entering into a correction phase. This decline in equity values has coincided with a notable upsurge in treasury yields, marking their highest levels since the 2007 Global Financial Crisis. As a proponent of the wisdom of remaining invested over time, I posit that the recent sell-off in U.S. equities may represent an opportune moment to amass shares in companies of exceptional quality. In this discourse, I shall delineate two equities that, in my assessment, hold the

U.S. equities have recently entered a period of seasonal vulnerability, following a robust start to the year. The most notable downturn has been witnessed in the tech-heavy Nasdaq index, which has incurred a decline exceeding 10%, thus entering correction territory. This prevailing selloff has been catalyzed by renewed concerns regarding inflationary pressures, as evidenced by crude oil prices surpassing the $95 per barrel mark and the 10-year Treasury yield surging beyond 4.5%, representing its highest level since the Great Financial Crisis of 2007. Oil Prices: Surge On Supply Concerns Brent Crude Futures have experienced a notable upswing, reaching their zenith for the year 2023. This surge follows a substantial reduction in U.S. crude oil inventories, compounding apprehensions concernin

In recent times, the robust beginning of the year for AI-related stocks has encountered obstacles, primarily stemming from a combination of hawkish monetary policies, a lacklustre initial public offering (IPO) market, and stagnant user growth. This has contributed to a decline in investor sentiment within the AI sector. However, it is my assertion that AI stocks remain poised for a promising future, and I recommend leveraging any short-term downturns as opportunities to acquire shares in reputable companies within this industry. The Macroeconomic Landscape AI stocks are known for their sensitivity to interest rates, given their status as high-growth entities trading at relatively elevated valuations compared to the broader S&P market. In light of persistent inflation, the Federal Reser

Amid an extraordinary confluence of factors, oil prices have surged past the $90 per barrel threshold. This surge is framed against a backdrop defined by unprecedented demand levels and growing concerns over potential supply constraints. It unfolds in the wake of Saudi Arabia's announcement that it will extend an additional 1 million barrels per day reduction in output until the year's end, despite the preexisting tightening conditions within the market. Projections emanating from a recent report by the Organization of Petroleum Exporting Countries (OPEC) indicate a substantial, forthcoming decline in global oil inventories. Anticipated over the next three months is a daily drop of approximately 3.3 million barrels, a depletion notably accentuated during the current quarter. Saudi Arabia'

The world of investing is constantly evolving, and staying ahead of the curve is crucial for success in the US stock market. In this article, we will explore the future trends of the US stock market and the key factors influencing it. We will also delve into the importance of having a solid auto-investment plan, making timely market entries during pullbacks, maintaining rationality in turbulent times, and aligning your investment plan with your risk tolerance. The US Stock Market The US Stock Market has outperformed both cash and bonds in the long run From a historical perspective, the US Stock Market has consistently delivered robust returns to investors. On average, the S&P 500 Index (SPX) has generated an impressive, annualized return of 9.29%, surpassing the performance of traditio

US Tech stocks have marked an impressive and dynamic start to the year 2023, showcasing a remarkable rally that has seen the Nasdaq surge by nearly 40% year-to-date. This phenomenal surge has been largely attributed to the exceptional performance of the 'magnificent seven' tech giants: $Apple(AAPL)$ (Apple), $Microsoft(MSFT)$ (Microsoft), $Meta Platforms, Inc.(META)$ (formerly known as Facebook), AMZN (Amazon), NFLX (Netflix), $Tesla Motors(TSLA)$ (Tesla), and $NVIDIA Corp(NVDA)$ (Nvidia). Collectively, these tech behemoths have accounted for over 70% of the overall gains, playi

Positive Macroeconomic News Points to Easing Monetary Conditions The US inflation rate slowed to 3% in June 2023, the lowest since March 2021 and below expectations of 3.1%. The slowdown was partly due to a high base effect from last year, with food, energy and shelter prices cooling off in recent months. Producer prices also signaled a slowdown in economic activity, rising 0.1% month-over-month in June 2023, below market forecasts of 0.2%. The market is now pricing in a 25 bps rate hike in July which is expected to be the last in the current rate hike cycle. United States Inflation Rate Consequently, the DXY has broken a key level of resistance at $101 as traders contemplate the end of the Fed’s rate hikes. USD weakness is good news for commodities bulls as it translates to higher expor

Following a stellar start to 2023, the S&P 500 index has now recorded close to a 15% gain year-to-date. However, most of the rally has been concentrated in Large Cap US Tech stocks. The S&P 500 Ex-Information Technology Index is up less than 2% YTD, heavily underperforming the S&P. This underperformance can be attributed to the rise of Generative AI, with companies such as Nvidia, Meta and Tesla contributing to a significant portion of the gains in tech. Best-Performing Stocks of Q1 2023 | Morningstar Macroeconomic Update The US economy is showing no signs of recession despite echoes from the Fed maintaining its hawkish stance. The labour market remains extremely tight with the unemployment rate at 3.6% as of Jun 2023. Following this week’s mixed job data, traders will be looki

US stocks continued where they left off in Q1 2023, posting strong gains despite a hawkish tone from the Fed. The S&P 500 Index is now up over 15% year-to-date with the US economy yet to show any signs of a recession. The US economy grew at an annualized rate of 2% in Q1 2023, well above forecasts of 1.4%. Consumer sentiment remains strong, while jobless claims continue to tick lower indicating a resilient economy backed by a tight labor market. Inflation now stands at 4%, the lowest since 2021 as energy prices continue to experience a decline. The Fed has indicated that it is keeping the door open to more rate hikes with some members arguing that the current Fed Rate “should be sufficient to move inflation toward the 2% target over an acceptable time frame. Since inflation is now belo