Current market environment performance of dynamic, risk-managed investment solutions.
By Will Hubbard
Market snapshot
• Stocks moved higher despite mixed economic data.
• Bond yields fell as investors balanced duration risk, inflation, and economic uncertainty.
• Gold extended its gains, outpacing equities year to date, as market uncertainty persisted.
• Market indicators and outlook: Market regime indicators show the market is in a Normal economic environment stage, which is historically positive for stocks, bonds, and gold but with a substantial risk of a downturn for gold. Normal is one of the best stages for stocks, with limited downside. Volatility is Low and Falling, which favors stocks over gold, then bonds.
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Equity markets moved higher last week. The S&P 500 gained 1.52%, the NASDAQ Composite rose 2.60%, the Dow Jones Industrial Average added 0.65%, and the small-cap Russell 2000 inched 0.05% higher. In the bond market, the 10-year Treasury yield dropped from 4.50% to 4.48%. Gold came close to setting a new all-time high but pulled back Friday, closing at $2,882.53 per ounce.
For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.
Stocks
Equity markets experienced relatively strong performance last week, with larger-cap technology stocks leading the way. The NASDAQ Composite outperformed as tech stocks rallied, while the Dow Jones Industrial Average lagged primarily due to Microsoft’s recent struggles. Since its earnings report in late January, Microsoft has lost nearly 10% of its value, failing to regain traction despite a favorable market environment.
Equity markets remain resilient, trading near all-time highs. The NASDAQ 100 has now traded above its 200-day moving average for 485 consecutive days, marking its second-longest streak since 1985, according to Bespoke Investment Group.
Last week’s economic data was generally weaker than expected:
• Consumer price index (CPI): Wednesday’s report showed an unexpected increase in both core and headline CPI. Core CPI rose 0.4% month over month, while headline CPI increased by 0.1% on an annualized basis, coming in at 3.0% instead of the 2.9% forecast.
• Producer price index (PPI): Core PPI matched expectations, rising 0.3% month over month, but headline PPI came in at 0.4%—higher than the expected 0.3%.
• Retail sales: Core retail sales fell 0.4% for the month, compared to the anticipated rise of 0.3%. Headline retail sales decreased by 0.9%, a much greater decline than the 0.2% expected. Retail weakness has been an ongoing trend, with Target CEO Brian Cornell previously noting softness in discretionary spending due to stretched consumer budgets.
On the policy front, President Trump announced new tariffs on steel and aluminum imports Monday night, leaving metal producers assessing how the rules—set to take effect on March 12—will impact their businesses.
Corporate earnings data has been relatively mixed:
• Amazon shares fell after the company issued weak revenue guidance.
• Apple and Coca-Cola gained on positive earnings news.
• Large-cap technology stocks, a market favorite, are up only around 1.6% this year, trailing the S&P 500’s 4.11% gain.
• Financials and Communication Services—largely led by Meta—have led sector performance so far in 2025.
The variation in earnings and outlooks from different companies in different sectors highlights the challenges investors face in navigating today’s market. In our view, the most resilient portfolios adapt to changing market conditions. One of the best ways to achieve this is by incorporating uncorrelated investments—investments that do not move in sync with traditional stock market trends. These can include momentum-based strategies or commodity trading advisors (CTA) and other niche strategies that provide diversification. A well-balanced portfolio with uncorrelated investments can help mitigate the impact of market corrections and drawdowns.
Bonds
The 10-year U.S. Treasury yield started the week at 4.5% and edged down to 4.48% by Friday. Overall, yields were fairly flat, though rates declined slightly across the curve, except for one-month yields.
Yields appear to be normalizing, with investors demanding more compensation for duration risk. However, geopolitical risk and the possibility of economic weakening seem to be keeping yields lower despite persistent inflation. The best approach may be to dynamically allocate into these markets as shifting yields create new opportunities.
Gold
Gold rose 0.75% last week, closing at $2,882.53 per ounce. However, a decline on Friday nearly erased the week’s gains. Year to date, gold has climbed 9.83%, more than doubling the performance of equity markets. Gold and other non-traditional investments, such as managed futures, may present opportunities if market volatility increases.
Flexible Plan Investments is the subadviser to the only U.S. gold mutual fund, The Gold Bullion Strategy Fund (QGLDX), designed at its introduction 11 years ago to track the daily price changes in the precious metal.
The indicators
The QFC S&P Pattern Recognition strategy remained 20% long throughout the week. Our QFC Political Seasonality Index started the week in its risk-off posture but shifted to risk-on at Tuesday’s close. (Our QFC Political Seasonality Index is available—with all of the daily signals—post-login in our Weekly Performance Report section under the Domestic Tactical Equity category.)
Our intermediate-term tactical strategies have been varied in their degree of defensive positioning. The key advantages these strategies offer to investors are their ability to adapt to changing market environments, participate during uptrends, and adjust exposure to more defensive posturing during downtrends.
The Volatility Adjusted NASDAQ (VAN) strategy started the week 60% long, increased to 120% long on Tuesday’s close, and held that position for the rest of the week. The Systematic Advantage (SA) strategy remained 120% long throughout the week. Our QFC Self-adjusting Trend Following (QSTF) strategy started the week 100% long, moved to cash on Wednesday, then shifted to 200% long on Thursday’s close, where it remained for the rest of the week. VAN, SA, and QSTF can all use leverage, so the investment positions may exceed 100%.
Our Classic model was long risk-on positioning all week. Most of our Classic accounts follow a signal that will allow the strategy to change exposure in as little as a week. A few accounts are on more restrictive platforms and can take up to one month to generate a new signal.
Flexible Plan’s Growth and Inflation measure, one of our Market Regime Indicators, shows that we are in a Normal economic environment stage (meaning a positive monthly change in prices and a positive monthly change in GDP). Historically, a Normal environment has occurred 60% of the time since 2003 and has been a positive regime state for stocks, bonds, and gold. Gold tends to outpace both stocks and bonds on an annualized return basis in a Normal environment but carries a substantial risk of a downturn in this stage.
Our S&P volatility regime is registering a Low and Falling reading, which favors stocks over gold and then bonds from an annualized return standpoint. The combination has occurred 37% of the time since 2003. It is a stage of low risk for equities.