20 June 2022

Hello reader!

The market experienced a broad selloff last week putting major indexes on a path to new lows. A key shift in market risk has occurred as a potential recession now becomes a more prominent threat with the continued rise in inflation headline numbers. It has prompted the Federal Reserve (FED) to increase the size of its rate hike last week and renew its commitment to tame inflation in no uncertain terms. It is clear that the Fed means business and will risk a slowdown or a recession to bend the inflation trend towards its long-term goal.

Small cap stocks thus far had relatively outperformed as the risk of a recession was lower. That dynamic was forcefully changed last week and mounting recession concerns are not good for stocks in general and small caps in particular. We are now likely entering a new leg down in this bear market. However, with the market exceptionally oversold near-term, there is a likelihood of a low-grade rally. We will look to reduce the model portfolio holdings in the days ahead. No change to the model portfolio is being made at this time.

For any questions, kindly contact us at support@GraycellAdvisors.com.

Sincerely,
Graycell Advisors

Graycell Advisors, and its affiliates, officers, employees, families, and all other related parties, collectively referred to as ‘Graycell’ and/or ‘we,’ is a publisher of financial information, such as the Prudent Biotech and Smallcap newsletters. Historical performance figures provided are hypothetical and unaudited, and based on our proprietary analysis and system performance, back-tested over an extended period of time. The performance results obtained are intended for illustrative purposes only. Past performance is not indicative of future results, which may vary. All stock and related investments have a degree of risk, which can result in a significant or total loss. In addition, smallcap segment is characterized by much higher risk and volatility than the general stock market. The Information contained herein does not constitute a personal recommendation or takes into account the particular investment objectives, financial situations, or needs of individual investors. If you decide to invest in any of the stocks of the companies mentioned in the newsletters, samples, alerts, etc., sent to you or available on our websites, you can and may lose some or all of your investment. You alone are responsible for your own investment decisions. We are not liable nor do we assume any responsibility for losses incurred as a result of any information provided or not provided or not made available in a timely manner, herein or on our website or using any other medium.  We also cannot guarantee the accuracy and completeness of any information furnished by us. Graycell is not a registered investment advisor and nothing contained in any materials should be construed as a recommendation to buy or sell securities. We may or may not already have existing positions in the stocks mentioned in our reports. Our models are proprietary and/or licensed and can be changed or revised based on our discretion at any time without any notification. Subscribers and investors should always conduct their own due diligence with any potential investment and consider obtaining professional advice before making an investment decision.