V2 Model August 27, 2022 UPDATE

Recap

Markets pull back sharply this week as the SP500 ended its streak of 4 straight weekly gains. Markets got an unwelcome reminder from Federal Reserve Chairman Powell in his speech on Friday. He indicated that fighting inflation remains the top priority and that rates may stay higher for longer.

The week started with a thud and ended with an even bigger thud. The common catalyst was Fed Chair Powell's policy speech at the Jackson Hole Economic Policy Symposium.

On Monday, market participants were reportedly anxious that Mr. Powell's speech would sound resolutely hawkish. The S&P 500 declined 2.1% on Monday. On Friday, Mr. Powell sounded resolutely hawkish and the S&P 500 declined 3.4%, wiping out a half-hearted (and low volume) bounce off Monday's lows that were seen in the intervening sessions.

When the closing bell rang on Friday, the major indices were down 2.9-4.4% for the week.

The V2 Model was down this week even as we changed the V2 portfolio allocations. Are we heading to new market lows? We continue to outpace the SP500 by over 15%.

Performance This Week / YTD

V2 -3.75% / +.99%

SPY -3.99% / -14.20%

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