U-optimize @U-optimize: "𝙈𝙤𝙣𝙩𝙝𝙡𝙮 𝙊𝙫𝙚𝙧𝙫𝙞𝙚𝙬 YTD performance: U-Optimize Portfolio +9.02%..."

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𝙈𝙤𝙣𝙩𝙝𝙡𝙮 𝙊𝙫𝙚𝙧𝙫𝙞𝙚𝙬 YTD performance: U-Optimize Portfolio +9.02% S&P 500 +7.28% The portfolio is now balanced with a higher exposure to market beta, driven by the pickup in general global liquidity momentum. It is important to note that in the stock market, liquidity can often override negative fundamental data and drive the market higher, even in conditions where the market consensus is that "the worst is yet to come." Although long-term inflation expectations remain unanchored and are still above the level needed for a normally functioning economy, the probability of episodes of moderation in inflation pressure in the medium term has increased following several credit events we have seen YTD. The market has revisited its lower valuation bound based on non-recessionary conditions and has the potential to rebound to a higher level. This is further supported by the current implied volatility levels that recently pivoted towards the investable range. Our analysis suggests that without surprises in inflation data, cyclical companies can start to outperform the broader market and help improve the breadth of the market rally. Historically, pauses in rate hikes were more positive than rate cuts in terms of forward performance over a 3 to 6 month period. Rate cuts from higher levels almost always signal troubles and much lower growth momentum, something that bulls should not expect. Based on our macro model, our outlook for the market is mildly positive for 2023, with more downside in risk assets expected towards the end of the year. The $SPX500 range is expected to remain between 4080-4845, provided we avoid a recessionary consensus scenario. In light of these conditions, the portfolio is currently leaning towards more cyclical companies on the long side and shorts in defensive sectors, which are far above their valuation parameters based on profitability momentum. Annual rebalancing of the portfolio is completed and is no longer requiring any strategic allocation changes. Tactically, balancing of long/short weight positions can become appropriate in light of material signals in both macro and liquidity models.

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SPX500