We hope that all of you had a wonderful Thanksgiving holiday. Judging by the data above from the Transportation Security Administration (TSA), it looks like some of our readers traveled by airplane over the weekend. We are almost back to 2019 air travel levels, finally pushing past the 80% of 2019 traffic that we had stayed at for four months. Heading to the airport it only seems like they are full beyond normal limits.
This is all just in time for the new COVID variant, Omicron. Never mind that its name sounds like a transformer, we saw the news of a new variant overwhelm the markets to the downside on a very light trading day last Friday with the S&P 500 ending the day -2.27%. Reopening equities were specifically hard hit with airlines, as represented by the US Global Jets ETF (Ticker: JETS), down -7.2% on Friday. It is important to note that travel related equities had already been facing a difficult November with JETS -17% since their recent high earlier this month and -28% off their 2021 highs reached in March. The reality is that there is good news as well coming off this weekend with MasterCard reporting +14% spending on Thanksgiving weekend from 2020. We don’t know what narrative will ultimately win.
What does this bout of volatility mean? When it has been a few months since a -2% day, it does tend to jolt us out of our calm places. We have become so used to good news that we forget that a bit of bad news can couple with relatively low liquidity (around market holidays) to cause equities to move faster to the downside than normal.
We don’t know what Omicron will ultimately turn out to be. There are, as always, conflicting reports about the severity of this new variant and we hope that the best anecdotal news that is coming out of South Africa proves true. But with the recent positive run in the markets causing valuations to be stretched to the upside we can expect that negative news will have a deleterious effect on equity values. This does not mean that equities will fall far (nobody can see the future on that), but it is always a good to review your risk/reward considering your long-term goals after a run up like we have seen in 2021.
Model Update
On Monday, November 22nd, both the Fortunatus Emerging Growth Companies model and the Fortunatus Alternative Asset ETF Opportunity model made changes to their underlying holdings. The Emerging Growth Companies model increased its exposure to companies involved in creating and maintaining cryptocurrency and electric vehicle infrastructures. The Alternative Asset model added to its Bitcoin-focused allocation.
There were no other trades in the Fortunatus models during the week ending on November 27th, 2021. The major equity market sectors remain in a long-term favorable trend, and the Fortunatus Asset Allocation models are near their maximum allowable equity exposure with domestic stocks favored over international shares.
Past performance is no guarantee of future results. Trend signals are proprietary research of Fortunatus Investments, LLC, a Registered Investment Advisor with the Securities and Exchange Commission (SEC). Reference to registration does not imply any particular level of qualification or skill. Prior to June 2014, Fortunatus Investments was a wholly-owned subsidiary of Executive Wealth Management, LLC and they continue to share common ownership and control. The data source for returns is FactSet Research Systems Inc. This chart is not intended to provide investment advice and should not be considered as a recommendation. One cannot invest directly in an index. Executive Wealth Management does not guarantee the accuracy of this data.
Quote of the Week
Nicholas Cage. We discussed this briefly, but I want to express just how many Nic Cage memes there are flying around…Nic Cage has become the face of this faceless movement. No Nic Cage memes, no Constitution.
From a recent article “Let’s Buy the US Constitution” from technology commentator Packy McCormick about the effect images of the prolific actor had on galvanizing a collection of internet friends to raise $47 million in cryptocurrency in an attempt to purchase an original copy of the United States Constitution at a recent Sotheby’s auction. The decentralized autonomous organization (DAO) created to buy the historic document ultimately came up just short of its goal, but it did create significant media buzz about the new possibilities in blockchain-based fundraising.
EWM News
The year is winding down, and you may be thinking of giving.In fact, you may want to explore the different ways in which you can donate to a charity or non-profit organization, apart from just making a cash gift. Consider some of the alternatives. Read more…
Executive Wealth Management (EWM) is a Registered Investment Advisor with the Securities and Exchange Commission. Reference to registration does not imply any particular level of qualification or skill. Investment Advisor Representatives of Executive Wealth Management, LLC offer Investment Advice and Financial Planning Services to customers located within the United States. Brokerage products and services offered through Private Client Services Member FINRA/SIPC. Private Client Services and Executive Wealth Management are unaffiliated entities. EWM does not offer tax or legal advice. Please do not transmit orders or instructions regarding your accounts by email. For your protection, EWM does not accept nor act on such instructions. Please speak directly with your representative if you need to give instructions related to your account. If there have been any changes to your personal or financial situation, please contact your Private Wealth Advisor.
Returns are calculated as indicated below with reinvested dividends not considered except for the Barclays U.S. Aggregate Bond Index. Data source for returns is FactSet Research Systems Inc. The London Gold PM Fix Price is used to calculate returns for gold.
1 Week = closing price on November 19, 2021 to closing price on November 26, 2021
1 Month = closing price on October 26, 2021 to closing price on November 26, 2021
3 Month = closing price on August 26, 2021 to closing price on November 26, 2021
YTD = closing price on December 31, 2020 to closing price on November 26, 2021
All information and opinions expressed in this document were obtained from sources believed to be reliable and in good faith, but no representation or warranty, express or implied, is made as to its accuracy or completeness. All information and opinions as well as any prices indicated are current only as of the date of this report, and are subject to change without notice. Material provided is for information purposes only and should not be used or construed as an offer to sell, or solicitation of an offer to buy nor recommend any security. Any commentaries, articles of other opinions herein are intended to be general in nature and for current interest. Some of the material may be supplied by companies not affiliated with EWM and is not guaranteed for accuracy, timeliness, completeness or usefulness and EWM is not liable or responsible for any content advertising products or services.
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