Market insights and analysis

By Daniel Poppe

Market snapshot

•  Stocks: Stocks were down last week.

•  Bonds: The 10-year Treasury yield rose last week.

•  Gold: Spot gold rose last week, closing above $3,000 an ounce.

•  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 High and Rising, which favors stocks over gold and then bonds.

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The major U.S. stock market indexes were down last week. The Dow returned -0.96%, the S&P 500 returned -1.52%, the Russell 2000 returned -1.62%, and the NASDAQ Composite returned -2.59%. The 10-year Treasury bond yield rose from 4.25% to 4.27%. Spot gold closed the week up 1.79%.

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

The SPDR S&P 500 ETF (SPY), which tracks the performance of the S&P 500, finished the week below both its 50-day and 200-day moving averages.

Stocks remain near their lowest levels of the year as concerns persist over the broad range of tariffs introduced by President Trump. These tariffs, which apply to goods coming into the U.S. from numerous countries, tend to raise import costs for U.S. consumers and add inflationary pressures to the economy. This could reduce consumer spending and put pressure on GDP growth.

This comes at a time when GDP growth has already slowed. According to the Bureau of Economic Analysis, the economy grew at an annualized rate of 2.4% in the fourth quarter of 2024, down from 3.1% in the third quarter. Additionally, the Federal Reserve Bank of Atlanta’s GDPNow model shows a contraction in GDP for the first quarter of 2025, in large part due to a surge in gold imports.

Consumers have not been shy about expressing their concerns for the future of the economy. The University of Michigan’s consumer sentiment index fell to 57 in March, its lowest reading since November 2022.

Bonds

The iShares 7-10 Year Treasury Bond ETF (IEF), which tracks intermediate-term Treasury bonds, finished last week above both its 50-day and 200-day moving averages.

Bond prices moved sideways throughout March after rallying earlier in the year. Market participants are waiting to see if and by how much the Federal Reserve will lower interest rates throughout the remainder of the year.

The Fed must balance concerns about rising inflation with the risk of increasing unemployment when determining its policy rate. Ongoing tariff discussions have raised fears that inflation could accelerate. At the same time, lower GDP growth expectations and potential retaliatory tariffs that weaken demand for U.S. exports create concerns that unemployment could rise.

For now, market participants are expecting the Fed to keep rates unchanged as it continues to monitor new data. According to the CME Group’s FedWatch tool, there’s currently less than a 20% chance of a rate cut at the Federal Open Market Committee’s next meeting in May.

Gold

The SPDR Gold Shares ETF (GLD), which tracks the price of gold, finished the week above both its 50-day and 200-day moving averages.

Flexible Plan Investments (FPI) 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 in a more tax-efficient manner than its ETF counterpart, GLD.

FPI’s indicators

The QFC S&P Pattern Recognition strategy’s primary signal started last week with a 20% net long exposure to the S&P 500. Exposure changed to a 30% net long exposure on Wednesday, a 0% net long exposure on Thursday, and a 40% net long exposure on Friday.

Our QFC Political Seasonality Index strategy was defensive going into the week. On Monday, the strategy went aggressive. (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.)

The Volatility Adjusted NASDAQ strategy started the week with a 20% net short exposure to the NASDAQ 100. Exposure changed to 0% on Tuesday.

The Systematic Advantage strategy held a 60% net long exposure to the S&P 500 throughout the week.

Our QFC Self-adjusting Trend Following strategy’s primary signal was 80% net long the NASDAQ 100 at the start of the week. It changed to 200% net long on Monday, 100% net long on Thursday, and 0% exposure on Friday.

The Volatility Adjusted NASDAQ, Systematic Advantage, QFC Self-adjusting Trend Following, and the QFC S&P Pattern Recognition strategies can all employ leverage, which means their investment positions may at times exceed 100%.

Our Classic model remained in stocks throughout last 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 platforms that are more restrictive and can take up to one month to generate a new signal.

FPI’s Growth and Inflation measure is one of our Market Regime Indicators. It 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 High and Rising reading, which favors stocks over gold and then bonds from an annualized return standpoint. The combination has occurred 23% of the time since 2003. It is a stage of high risk for equities.