MARKETS TODAY Nov 24 (Vica Partners) – US Markets closed for the Thanksgiving Holiday
Asian shares gained Thursday as US Markets are beginning to price in that the Fed will slow and pause interest rate hikes in order to protect the economy. Japan’s benchmark Nikkei 225 jumped 1.0% to finish at 28,383.09. Australia’s S&P/ASX 200 added 0.1% to 7,241.80. South Korea’s Kospi gained nearly 1.0% to 2,441.33. Hong Kong’s Hang Seng rose 0.6% to 17,626.00.
Stocks closed higher on Wall Street after minutes from the Federal Reserve’s most recent policy meeting showed central bank officials agreed to smaller rate hikes.
The S&P 500 rose 0.6% to 4,027.26, while the Dow Jones Industrial Average gained 0.3% to 34,194.06. The Nasdaq composite closed 1% higher to 11,285.32.The Russell 2000 index of smaller companies edged higher, adding 0.2% to close at 1,863.52. Long-term Treasury yields fell. The yield on the 10-year Treasury, which influences mortgage rates, slipped to 3.69% from 3.76%.
Technology stocks and some big retailers helped drive a big share of the gains in the benchmark S&P 500 index Wednesday. Chipmaker Nvidia rose 3% and Target rose 3.5%.
In energy trading, benchmark U.S. crude lost 47 cents to $77.47 a barrel. Brent crude, the international standard, fell 66 cents to $84.75 a barrel.
S&P 4,000 level benchmark closed above 200 day moving average
The S&P 500 is on its 200-day moving average. The line has been a resistance level for the index, most notably in April and August and can indicate a breakout. Since the late September lows the index is up +12% today.
Vica Momentum Stock Report
China Automotive Systems NYSE (CAAS) (Grade A) 50 Day Average +41.37%, 100 Day Average +117.45%, 200 Day Average +118.25, YTD +123.13%.
China Automotive Systems is a holding company and has no significant business operations other than their interest in Genesis in which they manufacture power steering systems and other component partsfor automobiles.
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 continue to be highly profitable “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 continued devaluation 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
*** Banks will profit from higher interest rates on new loans and other products which will offset defaults
