Current Recommendations

Model / Changes / Holdings As of 9/23/19
Tactical Fixed Income
Most recent allocation changes as of 9/16/2019
Holdings: BAB, BIV, BND, SRLN, VCIT
+1.1% wk +6.3% ytd
Global Multi-Asset Income
Most recent allocation changes as of 9/16/2019
Holdings: GLDI, SDY, SPHD, USMV, VNQ
+0.8% wk +3.2% ytd
Factor Rotation
Most recent allocation changes as of 9/16/2019
Holdings: ALFA, MOAT, VLUE, Cash (1%)
-0.6% wk +4.1% ytd
Sector Rotation
Most recent allocation changes as of 8/26/2019
Holdings: ICF, IHI, ITB, XSD
+0.3% wk +0.7% ytd
International Rotation
Sell iShares MSCI Switzerland ETF (EWL) (20%)
Buy Global X MSCI Greece ETF (GREK) (20%)

Holdings: ASHR, DXJ, EWN, EWT, GREK
-0.8% wk -6.6% ytd

 

Note: New recommendations recorded at the closing price on the day recommendation is made. You may place trades as soon as you receive this update. 

Commentary
Fed Announces Second Rate Cut of the Year

Last week, the Fed announced it was lowering its target rate from a range of 2%–2.25% to a range of 1.75%–2%. This is the second rate cut of the year. The rate reduction indicates the Fed is still concerned that slowing growth in economies abroad could come to the U.S. and demonstrates its willingness to take precautionary measures to give the U.S. economy a better chance of sustaining its expansion. The lower interest rates could increase the likelihood of households and businesses borrowing more money to make purchases and help bolster GDP growth amid an environment of high trade tensions and uncertainty.

The lingering uncertainty appears to have even crept into the Fed itself. The Wall Street Journal reports that three Fed officials opposed the decision to lower the target rate range by a quarter point last week. One of those was James Bullard, president of the Federal Reserve Bank of St. Louis, who believes a larger 50-basis-point cut would have been better. The other two dissenters—Eric Rosengren, president of the Federal Reserve Bank of Boston, and Esther George, president of the Federal Reserve Bank of Kansas City—believe another cut wasn’t needed at this time.

Fed officials also don’t agree on where rates should go in the future. Five of the 17 policy makers project rates will stay in the 1.75%–2% range through the end of the year. Seven project one more quarter-point cut. The remaining five see rates going back up to 2%–2.25% before the year is over.

Tactical Fixed Income rose 1.1% last week. The worst-performing holding was the SPDR Blackstone/GSO Senior Loan ETF (SRLN), which rose 0.15%. The best-performing holding was the Invesco Taxable Municipal Bond ETF (BAB), which rose 1.54%. There were no changes to the strategy this week.

Global Multi-Asset Income rose 0.8% last week. The worst-performing holding was the SPDR S&P Dividend ETF (SDY), which fell 1.02%. The best-performing holding was the Vanguard Real Estate ETF (VNQ), which rose 1.98%. There were no changes to the strategy this week.

Factor Rotation fell 0.6% last week. The worst-performing holding was the iShares Edge MSCI USA Value Factor ETF (VLUE), which fell 1.61%. The best-performing holding was the AlphaClone Alternative Alpha ETF (ALFA), which fell 0.05%. There were no changes to the strategy this week.

Sector Rotation rose 0.3% last week. The worst-performing holding was the SPDR S&P Semiconductor ETF (XSD), which fell 2.13%. The best-performing holding was the iShares Cohen & Steers REIT ETF (ICF), which rose 2.13%. There were no changes to the strategy this week.

International Rotation fell 0.8% last week. The worst-performing holding was the Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR), which fell 3.95%. The best-performing holding was the iShares MSCI Switzerland ETF (EWL), which fell 0.53%. This week, the strategy sold the iShares MSCI Switzerland ETF (EWL) and bought the Global X MSCI Greece ETF (GREK).

 

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