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Market Performance to Date in 2024 - An Uneven Rally

An uneven rally

Studies have shown that the top 8 large-cap US companies performed well last year, with all of them closing near their yearly highs. However, starting this year, 3 out of 8 have begun to trend lower, while the others continue to break new historical highs. This divergence could be hinting to investors to take a more cautionary note in how we invest or trade.

8 Top Large Cap US Companies

Source: TradingView as of 07 Mar 24

Investing is defined as allocating capital into assets with the expectation of long-term financial returns, whereas trading involves buying and selling financial instruments, aiming to profit from short-term price fluctuations.

Source: TradingView as of 07 Mar 24

The main reason for this rally starting from 2023

The last sector stock rush was in EV, and now it has transitioned to AI. In every season, investors will find an excuse to enter the market. This rally extends beyond AI expectation; the main reason for it is the easing of inflation from 9% in June 2022 to current rate of 3.1%. However, this easing of inflation seems to be plateauing. Last Wednesday, Fed Chair Jerome Powell reiterated that the central bank does not plan on cutting interest rates any time soon.

A synchronized rally

Is inflation making a comeback? With reference to gold, which is always regarded as an inflationary hedge asset, it indicates that inflation risk is on the rise again. Savvy investors are accumulating gold, while both Gen Z and the millennials are also participating in this inflationary hedge activity with cryptocurrency, as both gold and bitcoin have started surging since February. 

US Inflation Rate YoY

Source: TradingView as of 07 Mar 24

Trading strategy: If you fail to plan you plan to fail

What is your plan if you were to buy into one of the hottest stock this evening? Do you intend to invest or to trade them? This is a fundamental and yet important question that we have to ask each time before purchasing any stock. With the inflation direction still uncertain, for US stocks, I would prefer to trade them and continue investing or even trade into inflationary hedge assets. 

Discover their strategies through this video.

Gold vs Bitcoin

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