MARKETS TODAY Nov 10 (Vica Partners) – The S&P 500 up +4.04% as of 10.15 a.m. Eastern. The Dow Jones Industrial Average up 806 points, or +2.48%, to 33,320. The tech based Nasdaq up +5.66%.
Stocks surging Thursday morning as the three major stock market indexes are rising, the 10-year Treasury yield down at 3.852%, -0.29%, the 2 year Treasury yield down at 4.324%, and the U.S. Dollar Index (DXY) down at $108.51,-1.83%. Oil prices mostly flat with Brent crude $92.85, +0.22%, and US West Texas Intermediate flat at $85.65, -0.21%.
The Consumer Price Index data showed inflation at its lowest annual increase since January and all under Economist forecasts.
The Consumer Price Index (CPI) measures the change in prices paid by consumers for goods and services, rose a modest 0.4% for the month and grew 7.7% in October from a year ago. That’s down from 8.2% in September and marks the lowest annual increase since January.
The Core Consumer Price Index (Core CPI) measures the changes in the price of goods and services, excluding food and energy, increased 0.3% for the month and 6.3% on an annual basis.
Initial jobless claims came in higher this morning at 225,000 on a forecast of 220.000.
Keep in mind that the stock market typically performs well in November…
The stock market typically performs well in November… November is tied with April for being the second-best month of the year, with the Standard & Poor’s 500 rising 1.5% on average during the month since 1950. Election Data over the past 78 years shows that party control over either chamber has relatively little to do with long-term changes in the broad S&P 500 stock index
Vica Momentum Stocks Report (Grade B+)
UnitedHealth Group Inc. NYSE (UNH) 100 Day Average +13.07%, 200 Day Average +18.47%, YTD +8.16%. Yield 1.22%
UnitedHealth Group, Inc. provides a wide range of health care products and services, such as health maintenance organizations, point of service plans, preferred provider organizations and managed fee-for-service programs.
IMPORTANT TO READ; Low interest rates will return!
The Federal Reserve gave guidance that back in August of 2022 that they would raise rates to 4% and have. Rate adjustments will drive down inflation and slow the pace of the economy. Company earnings will remain mixed with stronger support for Communication services, Consumer staples, Energy, Financials and Health care. As these sectors tend to perform well during recessions
Following 2022 we expect the Central Bank to begin to cut interest rates in late Q2 of 2023 to avoid an extended recession. As 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.
Look to Communication services, Consumer staples, Energy, Financials and Health care as these sectors tend to perform well during recessions
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 6-8% 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
