May 2024 Monthly Market Brief

Just returned last night from the NAAIM (National Association of Active Investment Managers) conference in Orlando, FL, where I had a chance to hang out with a couple legends in the industry, Greg Morris (one of my early mentors) and Larry McMillan.

A couple of the “golden nuggets” I picked up included:

Interesting statistics about commercial real estate (CRE):

• CRE debt is mostly held at community banks.
• The big banks and even regional banks only hold 10% and 11% of CRE debt, respectively.
• LTVs (loan to value) have dropped by 5-15%, so when banks need to refinance, in addition to rates being twice what they were when they initially borrowed, they might also need to bring more money to the table in order to keep up with new equity requirements (although, not ALL banks are changing their LTVs).

A few tid-bits on crypto-currencies:

• Ethereum (ETH) isn’t as “safe” as Bitcoin (BTC) because of software updates.
• That being said, demand is soaring for BTC.
• Furthermore, supply for BTC is waning with every halving, which takes place every 4 years.

There was more, but this is a market “brief,” so I’m going to keep it as such, moving on to our monthly, “Inverse Traffic Light” update on the S&P500:

1. Don’t allow the financial media to fool (or scare) you, as the market is still solidly in the “green zone.”
2. What we’ve been seeing right now is merely a market “pullback.”
3. Said another way, we aren’t even in “correction” territory, which wouldn’t be unhealthy if we were.
4. Further weakness down to / near the top of the “yellow/caution” zone would not be surprising.

What we’re seeing in the market is not what I’d consider to be a major market top.  Rather, I think this is going to pan out as a great buying opportunity for those looking to get into the market – who have cash sitting on the sidelines.