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December 2020 Trend Report
The broad stock market took a pause as the S&P 500 dipped. US 10 year Treasury yields were up, pulling Treasury bond prices down with stocks. Developed markets (VEA) were the top performers.
On the factor front, high dividend yield (VYM), small-cap value (VBR), and large-cap value (VV) all finished flat and outperformed the broad US equity market.
Lumber moved higher against gold by over 6% on December 9th, 2020 and broke to new intermediate-term highs. This historically has been a good sign for risk assets and moves inversely to volatility. Copper also gained against gold, moving higher.
The trend (price relative to 10 month EMA) is positive for US and international equities, commodities, REITs, and bonds. The US dollar is in a negative trend. However, most markets we follow are significantly overbought. Overbought is not a reason to sell, though. Remember, the trend is your friend until it ends.