II-Quality
Portfolio Review & Market Update Market Overview The S&P 500 index remains in a downward trend. From a technical standpoint, the index appears weak, trading below all key moving averages: SMA200, SMA50, and SMA20. Notably, the 50-day moving average (SMA50) has now crossed below the 200-day average (SMA200), forming a Death Cross—a widely followed bearish signal. At the same time, the U.S. dollar has weakened significantly, declining approximately 9% against the euro since the beginning of the year. Earnings & Valuation Analysts have continued to lower earnings forecasts. The current bottom-up EPS estimate for the S&P 500 stands at 268, down from 275 just over a month ago. With the index currently trading near 5,275, the implied forward P/E ratio is 19.67, compared to the 5-year average of 19.9 and the 10-year average of 18.3. From a fundamental perspective, it is difficult to see strong upward momentum in the index unless there is progress on trade negotiations and a more optimistic economic outlook emerges. Portfolio Performance Our portfolio has outperformed the S&P 500 in this declining market. As of year-to-date: - II-Quality: –2.17% - S&P 500 ( $SPX500 (SPX500 Index (Non Expiry)) ): –9.98% We continue to believe that high-quality stocks will outperform in the current environment. However, during periods of strong market rallies, cyclical stocks may temporarily lead in performance. Top Holdings & Notable Performers Our largest holdings include: $ORCL (Oracle Corporation) $GRMN (Garmin Ltd.) $WMT (Walmart Inc.) $TJX (TJX Companies Inc) Top performer of the week: Eli Lilly $LLY (Eli Lilly & Co)
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