By Dhaval Joshi, Chief Strategist at BCA Research
Executive Summary
- Always consider a market’s fundamentals combined with its fragility to assess the prospects of a price dislocation.
- Right now, the major stock and bond markets are more ‘anti-fragile’ than fragile, and the Joshi rule recession indicators signal that a US recession is not imminent.
- This justifies a neutral, or default, tactical weighting to both stocks and bonds until a major market does become fragile, or until recession risk elevates.
- The one major price trend that is fragile is the 65-day selloff in the US dollar. This justifies a tactical overweighting to the dollar.
