MARKETS TODAY Oct 7 (Vica Partners) – The S&P 500 down 2.93% as of 3:15 p.m. Eastern. The Dow Jones Industrial Average down 686 points, or -2.29%, to 29, 240. The tech based Nasdaq down 3.74%
Dow Drops over 700 Points and indexes Fall following a stronger than forecast jobs report. The 10-year Treasury note yield is up to 3.88%. U.S. Dollar Index (DXY) up at $112.87. Oil prices continue to rise with Brent crude +3.55% and US West Texas Intermediate crude +4.58%.
Labor market remains tight and will keep the Fed Hawkish in continuing to tighten monetary policy.
The govt reported 3.5% today as analysts were looking for 3.7%.
Total nonfarm payroll employment increased by 263,000 in September, and the unemployment rate edged down to 3.5 percent. Notable job gains occurred in leisure and hospitality and in health care. Source: U.S. Bureau of Labor Statistics Home.
REAL reason for volatile market today…
The Market is pricing in a 75 basis points Fed Rate hike in Nov as the September jobs report reinforced? the fact that the labor market remains tight and will keep the Fed on course for continuing to aggressively tighten monetary policy.
IMPORTANT TO READ as we forecast that inflation will turn into deflation in 2023
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 will rise “as there are 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!
*** 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
