Fears on Inflation, Rate Hikes and Recession Induce Market Sell-Off Today

MARKETS TODAY Sept 29 (Vica Partners) – The S&P 500 down 2.09% as of 11:15 a.m. Eastern. The Dow Jones Industrial Average down 452 points, or 1.48%, to 29,244. The tech based Nasdaq down 2.94%

The markets continue fall this morning following yesterday’s flash rally with the 10-year U.S. The S&P 500 is testing yearly lows with only three stocks in the index up.

Treasury yield rising to 3.9%, The U.S. Dollar Index (DXY), the barometer for global currencies up today at +112, levels not seen since 2002. Oil prices are slightly negative with Brent crude -.71% and US West Texas Intermediate crude -.37%.

Jobless claims data out today “better than expected”

Jobless claims data out today declined to 193,000, better than expectations for 215,000 claims, and continuing jobless claims at 1.35 million down from previous 1.38 million.

The markets fears about inflation, rate hikes, rising bond yields and recession continue not to be warranted by economic reports

For market indexes to recover, investors will need to see a consistent message from Fed on forecasting a mild recession and willingness to back off future rate hikes.

IMPORTANT TO READ as we forecast that inflation will turn into deflation

The Federal Reserve will be forced to cut interest rates in 2023 if a deep recession occurs as the cure for inflation is not just raising rates. As we 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 continue to drop include: iron. Copper and crude oil

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 9-12% valuation correction for speculative stocks. DON’T try to time market lows!

*** 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 shortly

 

Journal

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