Hey Peter Navarro here with this week's Market Rap Podcast and Substack is Bond Market Cash

Behind the Stock Market Bull.

Hi Peter Navarro here with this week's market wrap for the week ending, November 24,

2023, and by the way, happy Thanksgiving weekend.

The U.S. stock market took another quizzical leg up with the S&P 500 rising 2.2% for the week,

and up a total of 7.6% for what has been described as a red hot November.

This current rally has indeed defied the expectations

of most stock market analysts.

The question remains,

where does the market go from here?

And thinking about why the market has been moving up, despite all the signs of a rapidly

slowing economy, one possible explanation may be that of the dynamics of what is called asset allocation.

In the typical portfolio construction by a typical advisor, an individual portfolio will feature some mix of stocks and bonds, for example, a 50-50 split.

And note here that the older one is, the more likely your advisor will recommend a

split featuring a higher percentage of so-called safer bonds,

a strategy which, by the way, has been a disaster over the last several years

as these allegedly safe bonds have lost considerable value.

But that's a story for another day.

In the meantime, this asset allocation construction is based on the observation that at least in normal times,

bond prices move inversely to stock prices.

So a balanced portfolio has a natural built-in hedge. Now the

most important thing to know about how asset allocation strategies can affect the stock market trend is this.

...