MARKETS TODAY Nov 30 (Vica Partners) – U.S. stocks up on the last day of November as stocks rise following Powell’s comments and that U.S. private-sector job growth slowed from October however third-quarter U.S. GDP did come in higher than what economists expected.
Markets already had been pricing in about a 65% chance that the Fed would step down its interest rate increases to half of a percentage point in December,
The Dow Jones Industrial Average gained 737 points. The S&P 500 rose 3.09%, and the Nasdaq Composite jumped 4.41%.
Key Market Statistics
- Dow, S&P 500 and Nasdaq all ended higher today
- 10-year Treasury yield down at 3.637%, the 2 year Treasury yield down at 4.333%
- S. Dollar Index (DXY) down at $105.94, 0.83%
- Bitcoin up at $17,070, 3.85%
- Oil prices rise with Brent crude up $85.43, 2.89%, and US West Texas Intermediate up at $80.59 or 3.06%
Wall Street jumped on Wednesday after Federal Reserve Chair Jerome Powell said the central bank might scale back the pace of its interest rate hikes as soon as December
Powell said he sees the central bank in position to reduce the size of rate hikes as soon as next month and cautioned that monetary policy is likely to stay restrictive for some time until real signs of progress emerge on inflation. The chairman also noted that policy moves such as interest rate increases and the reduction of the Fed’s bond holdings generally take time to make their way through the system
Following today’s afternoon rally all the indexes end in plus/ positive for November
The Dow and S&P 500 both ended the month up 5.7% and about 5.4%, respectively, while the Nasdaq Composite gained 4.3%.
The S&P 500 finishes November above its 200-day moving average. The line has been a resistance level for the index, most notably in April, August and November. Since the late September lows the index is now up about 14%.
Vica Momentum Stock Report
PattersonUTI Energy NYSE (PTEN) (Grade A-) 50 Day Average +32.82%, 100 Day Average +29.98%, 200 Day Average +37.44, YTD +112.43%.
Company Profile: Patterson-UTI Energy, Inc. is an oilfield services company. It is one of the largest onshore contract drillers in the United States.
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 have begun to 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 initially raise rates and then begin to cut interest rates in late Q3 of 2023 to avoid 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 continue to rise “as there are still production shortages” which include: iron, copper and crude oil – upside should 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.
When buying value and growth DON’T try to time market lows. Best to cost average “buy” value stocks, and resist most all tech and growth stocks where companies have negative margins. Our Teams continue to forecast negative valuations for speculative stocks.
*** Continue to watch for our daily momentum company watchlist
*** 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 will regain strength
*** Banks will profit from higher interest rates on new loans and other products which will offset defaults
