New Allocations: 25% C Fund, 25% S Fund, 25% I Fund, 25% F Fund
Last night the European Union (EU) jumped into bed with the Federal Reserve Bank (FED), along with Japan, adding to its stimulus package. The FED has been pumping COVID stimulus money into the economy since late March, about $2.3 Trillion so far. Last night the EU kicked in 750 Bn Euros and Japan added another 117 Tn Yen.
With a US, EU and Japan backstop, it’s likely that we see this rally continue until wave 2 of COVID. The new commitment from EU and Japan has made the I fund pop! See the chart below…
Bottom Line: “Don’t Fight The FED” is an old adage. When central banks around the world are fully committed, you definitely don’t want to be on the wrong side of the trade…. As always, the charts dictate!