THIS WEEK’S FOCUS

When Confidence Drops and the Dollar Dominates: What to Do Now

The economic vibe check? Not great. Consumer confidence just hit its lowest point since 2020, and Americans are increasingly unsure about what’s next for jobs, incomes, and market conditions. At the same time, the US dollar is flexing its global dominance—thriving on chaos and creating opportunities for savvy investors.

It sounds complicated, but when you zoom out, these trends actually set the stage for long-term growth if you know how to navigate them.

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FEAR IS RISING, BUT THE FUNDAMENTALS TELL A MORE BALANCED STORY

📉 The Confidence Slump: Why Americans Are Uneasy

Consumer confidence fell to 104.7 in December, well below expectations. The decline comes as people brace for fewer jobs, stagnant incomes, and weaker business conditions in the next six months.

But here’s the twist: while perceptions are gloomy, the reality is less dire. Unemployment remains historically low, and businesses are still hiring—albeit cautiously.

What this means for you:

• Expect more short-term market volatility as consumer sentiment impacts stocks.

• Don’t let fear drive your decisions. The best investors focus on fundamentals, not feelings.

Pro Tip: Defensive investments like consumer staples, utilities, and dividend-paying stocks are great plays when confidence wanes.

HOW CHAOS STRENGTHENS THE U.S DOLLAR

🥛 The Dollar Milkshake Effect

The Dollar Milkshake Theory explains why the US dollar gets stronger during global crises. The theory hinges on these dynamics:

1. Flight to Safety: Investors see US assets (like Treasury bonds) as a safe bet when things get dicey globally.

2. Global Liquidity Trap: Emerging markets often borrow in US dollars. When the dollar strengthens, it creates repayment challenges for these economies, further boosting demand for dollars.

3. The Fed’s Influence: While rate cuts are slowing, US interest rates remain higher than many other nations’, attracting foreign capital into dollar-denominated assets.

   
   A strong dollar creates unique opportunities for US-based investors. It draws global money into American stocks, bonds, and even real estate.

TURN CHOAS INTO YOUR COMPETITIVE EDGE

🌍 Volatility + Dollar Strength: How to Invest Smarter in 2024

Here’s how to navigate this unusual moment in the markets:

1. Defensive Moves: Focus on recession-proof sectors like healthcare, consumer staples, and utilities.

2. Take Advantage of a Strong Dollar: Look for ETFs and funds tied to US assets. These benefit as international investors pour capital into the US.

3. Keep a Global Perspective: While emerging markets struggle now, their eventual recovery could provide a major upside opportunity. Consider long-term investments in regions like Southeast Asia or Latin America.

4. Lean on Automation: Platforms like Surmount let you automate data-driven strategies to take emotion out of decision-making.

SLOWER RATE CUTS SIGNAL UNCERTAINTY, BUT ALSO STABILITY

🔮 The Fed Factor: What’s Next for Rates?

Federal Reserve Chair Jerome Powell compared the current policy approach to driving in fog: move slowly, make careful adjustments, and avoid drastic changes.

While markets expected steeper rate cuts in 2025, the Fed is signaling caution. This may frustrate some investors, but the slower pace also reduces the likelihood of economic whiplash.

What you can do: Use this slower environment to build a balanced portfolio. Add growth-oriented stocks and ETFs alongside safer investments like bonds or REITs

STRONG FOUNDATIONS, FUTURE FOCUSED

Spotlight Strategy: Aerospace & Defense Innovators

Amid market uncertainty, one sector continues to stand out: aerospace and defense. Surmount’s Aerospace & Defense Innovators strategy focuses on companies leading the charge with innovation and a competitive moat, delivering strong returns even during turbulent times.

Performance Highlights

• Annual Return: 15.13%

• Risk Score: 1.66 (low to moderate risk)

• Alpha Capacity: $19,129,124.82

• 2023 Return: +39% (outperforming the S&P 500 by a wide margin)

This strategy is tailored for investors seeking consistent performance with low daily trading activity (0.03 trades/day), making it ideal for those who prefer long-term growth over high-frequency trading.

Key Features

1. Sector Focus:

   • Fully allocated to industrials, specifically aerospace and defense.

2. Top Holdings Include:

   • Lockheed Martin (LMT)

   • General Dynamics (GD)

   • Northrop Grumman (NOC)

   • Elbit Systems (ESLT)

   • Archer Aviation (ACHR)

3. Resilience in Volatility:

   • A balanced mix of established giants and innovative up-and-comers helps shield this strategy from extreme drawdowns (max -21%) while maintaining steady growth.

How It Works

This strategy evaluates aerospace and defense companies based on their innovation score and competitive moat, ensuring your portfolio captures leaders in cutting-edge tech and operational efficiency. With automated adjustments, you benefit from expert insights without having to lift a finger.

Why It’s a Smart Move Now

The global defense landscape is shifting, with increased spending and innovation driving growth in the aerospace sector. This strategy positions you to capitalize on long-term trends while managing risk effectively.

Whether you’re navigating market volatility or looking for future-focused growth, the Aerospace & Defense Innovators strategy offers the consistency and performance edge you need.

CHAOS ISN’T A THREAT — IT CAN BE A WEALTH-BUILDING OPPORTUNITY

🧭 Why Volatility Is Your Greatest Ally

Periods of uncertainty can feel overwhelming, but they also present unique opportunities. The combination of a strong dollar, cautious Fed policy, and consumer doubt creates a backdrop where disciplined, automated investing can thrive.