Current market environment performance of dynamic, risk-managed investment solutions.
By Daniel Poppe
Market snapshot
• Stocks: Stocks were mostly down last week.
• Bonds: The 10-year Treasury yield fell last week.
• Gold: Spot gold rose last week, closing above $3,300 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. While this favors stocks over gold and then bonds, it is also a period of high risk for equities.
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The major U.S. stock market indexes were mostly down last week. The Russell 2000 returned 1.11%, the S&P 500 returned -1.49%, the NASDAQ Composite returned -2.62%, and the Dow returned -2.66%. The 10-year Treasury bond yield fell from 4.48% to 4.34%. Spot gold closed the week up 2.76%.
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 pulled back after a historic jump on April 9 triggered by President Trump’s announcement of a softening of tariffs for countries other than China. Market participants may be waiting for signs of further easing, as the trade deals the administration says are in the works have yet to materialize. If progress on these deals stalls, additional tariff hikes could follow in the months ahead.
The shifting and uncertain nature of U.S. tariff policies has continued to fuel volatility in the market. The CBOE Volatility Index (VIX) remained elevated, ending last week above 29, signaling expectations for continued market turbulence.
First-quarter earnings season is kicking off. Beyond the results themselves, investors will be watching for forward guidance—particularly any insights into how companies expect the evolving tariff landscape to impact their business. Given the high degree of uncertainty, some companies may decline to provide guidance altogether.
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 markets, like stocks, have seen significant volatility in recent weeks. After President Trump’s April 2 tariff announcement, bonds initially rallied as investors moved out of equities and into bonds. However, they soon took large hits as yields rose. Simultaneously, U.S. stocks, U.S. bonds, and the U.S. dollar declined in value.
This runs counter to the popular belief that bonds and the dollar serve as reliable safe havens during periods of equity market stress. One possible explanation for recent bond market behavior is that foreign investors are selling their U.S. bonds in large quantities in response to President Trump’s tariff declarations. They may see fewer reasons to invest in the United States—not just in the equity market but in the bond market as well—given the new policy direction emerging from Washington.
This makes the future of the bond market very uncertain. It’s unclear to what extent foreign investment could flee the country or how much damage has already been done—even if the new policies are walked back to some degree.
On the short end of the yield curve, investor expectations have been shifting. The CME FedWatch Tool shows low odds for a rate cut at the Federal Reserve’s May meeting, but expectations are leaning toward a possible cut in June.
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 0% on Monday, to 10% net short on Tuesday, to 30% net long on Wednesday, and to 70% net long on Thursday.
Our QFC Political Seasonality Index strategy was aggressive throughout the week. (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 held an 80% net short exposure to the NASDAQ 100 throughout the week.
The Systematic Advantage strategy started the week 30% net long the S&P 500. On Wednesday, exposure changed to 60% net long before returning to 30% net long on Thursday.
Our QFC Self-adjusting Trend Following strategy’s primary signal was 0% net long the NASDAQ 100 throughout the week.
The Volatility Adjusted NASDAQ, Systematic Advantage, QFC Self-adjusting Trend Following, and the QFC S&P Pattern Recognition strategies can all employ leverage, so the investment positions may sometimes 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.