MARKETS TODAY Nov 2 (Vica Partners) – The S&P 500 down 2.50% as of 4.00 p.m. Eastern. The Dow Jones Industrial Average down 505 points, or -1.55%, to 32,147. The tech based Nasdaq down 3.36%.
The three major stock market indexes all declined Wednesday, the 10-year Treasury up at yield at 4.115%. U.S. Dollar Index (DXY) was up at $112.14. Oil prices mixed with Brent crude $96.16, +1.60%, and US West Texas Intermediate down at $88.98, -1.13%.
Today the 2 year Treasury yield rose to 4.628% which indicated a rate hike
No surprise on the rate hike today as the Fed gave the market guidance of about 4% back in August
Today as planned the Fed hiked the rate for a fourth straight 0.75 percentage raise and in line with guidance range of 4.00%. Most importantly, the Fed said it expects ongoing rate hikes but understands that inflation could decline enough for the central bank to slow down the pace of rate hikes fairly soon.
The rate on a 30-year fixed refinance mortgage dropped today
The average rate on a 30-year fixed mortgage refinance is 7.27%, while the average rate on a 15-year mortgage refinance is 6.50% and the average rate on a 5/1 ARM is 5.47%.
Private payrolls increases 239,000 in October, growth up in services sector
The pick-up in private hiring shown in the ADP National Employment report on Wednesday was concentrated in the services sector, specifically the leisure and hospitality industry.
IMPORTANT TO READ as low interest rates will return
The Federal Reserve will slow the pace and begin to cut interest rates in 2023 to avoid an extended recession. The cure for inflation is not just raising rates. Vica analysts see a significant policy change coming by late spring of 2023 with Powell reversing direction… just look at 12 month declining lower commodity pricing and new reports on rising retail inventories.
Yearly commodity prices will rise “as there are still production shortages” which include: iron, copper and crude oil. Upside will continue!
Solid strategy for these type of market days ….
We suggest investing in companies that have solid balance sheets and offer dividends.
Best to continue to cost average buy value stocks and resist most all tech and growth stocks where companies have negative margins. Our Teams forecast a negative 5-7% valuation correction for speculative stocks. DON’T try to time market lows!
*** Watch for our emerging 30/ 60/ 90 day Sector and leading company watchlist’s
*** Look to Index ETF’s like SPY to outperform stocks and most managed funds
*** Energy is the Top Performing Sector in S&P 500 Year to Date and is already regaining strength
*** Banks will profit from higher interest rates on new loans and other products which will offset defaults
