Current market environment performance of dynamic, risk-managed investment solutions.
By Daniel Poppe
Market snapshot
• Stocks: Stocks were higher last week.
• Bonds: The 10-year Treasury yield rose last week.
• Gold: Spot gold rose, closing the week up 0.64%.
• 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 Falling, which favors gold over bonds and then stocks.
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Index summary
The major U.S. stock market indexes were up last week. The Dow Jones Industrial Average returned 1.23%, the S&P 500 returned 1.54%, the NASDAQ Composite returned 2.2%, and the Russell 2000 returned 3.23%. The 10-year Treasury bond yield rose from 4.41% to 4.51%. Spot gold closed the week up 0.64%.
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 above both its 50-day and 200-day moving averages.
Stocks have continued to bounce off their early April lows. The S&P 500 finished the week above 6,000 and near the all-time high it set in February. Investors remain optimistic that new AI technologies will enhance productivity and boost earnings growth. However, there is also widespread skepticism that tariff levels will settle closer to the announced “Liberation Day” levels than where they were before.
The Atlanta Fed’s GDPNow estimate for Q2 2025 is currently sitting just under 4%—a massive turnaround from the negative growth seen in the first quarter. Positive GDP growth could ease recession fears. (A recession is often defined as two consecutive quarters of negative GDP growth.)
Stocks could still see difficulties during the rest of the year if tariffs end up at higher-than-expected levels, resulting in additional supply-chain disruptions. Continued uncertainty and rising long-term borrowing costs could also prevent companies from investing as much into the economy.
Bonds
The iShares 7-10 Year Treasury Bond ETF (IEF), which tracks intermediate-term Treasury bonds, finished last week below its 50-day moving average but above the 200-day moving average.
The bond market continues to show weakness due to concerns over the size and sustainability of U.S. federal debt and the budget deficit. The spending bill, which is now before the Senate after narrowly passing the House, is adding to these concerns. Yields have risen to entice investors to buy the new government debt, which is becoming riskier.
The Federal Reserve is meeting next week to determine if the federal funds target rate range should be adjusted. The market is pricing in a near certainty that the Fed will leave the rate unchanged.
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.
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.
Indicators
The QFC S&P Pattern Recognition strategy’s primary signal started last week with a 140% net long exposure to the S&P 500. Exposure changed to 130% net long on Monday, 110% net long on Tuesday, 70% net long on Wednesday, 60% net long on Thursday, and 140% net long on Friday.
Our QFC Political Seasonality Index strategy started the week in an aggressive stance, adopting a more defensive position on Friday. (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 40% net long exposure to the NASDAQ 100, increasing to 60% net long on Friday.
The Systematic Advantage strategy began the week with a 120% net long exposure to the S&P 500, decreasing to 90% net long on Monday.
Our QFC Self-adjusting Trend Following Strategy’s primary signal was 200% 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 investment positions may 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 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 Falling reading, which favors gold over bonds and then stocks from an annualized return standpoint. The combination has occurred 13% of the time since 2003. It is a stage of strong returns for gold.