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Valens Market Phase Cycle Monitor – November 2023 – More And More Signals Point Towards A Slowdown

November 16, 2023

  • More And More Signals Point Towards A Slowdown. The Fed’s efforts to slow lending continue to push management teams to be more cautious. Uniform earnings growth continues to decelerate. Profits are forecast to decline, and multiple signals for investment show decelerating management confidence.
  • Corporate Credit Metrics Are Showing Signs Of Growing Stress. Credit availability is lacking, and corporations and individual consumers are starting to show pressure from credit tightening. Credit issues highlight the risk of a recession growing.
  • After the recent strong bounce-back rally, the market is back towards neutral sentiment levels.
  • Monthly inflections:
    • Credit (55% of macro outlook): Negative (no change)
    • Earnings Growth (30%): Negative (no change)
    • Momentum/Sentiment (10%): Neutral (no change)
    • Valuations (5%): Negative (no change)
  • Timetable Recommendation: 40% Equity/60% Bond Split for 5-10 Year Money and 22 Month Dollar Cost Averaging.

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