MARKETS TODAY Sept 30 (Vica Partners) – The S&P 500 up .09% as of 10:30 a.m. Eastern. The Dow Jones Industrial Average down 78 points, or .22%, to 29,147. The tech based Nasdaq up .47%
The markets are wavering this morning looking for a direction after yesterday’s selloff in tandem with the 10 Year Treasury note at 3.73% and U.S. Dollar Index (DXY) $112.4. Oil prices are slightly negative with Brent crude -.21% and US West Texas Intermediate crude -.74%.
U.S. consumer spending increased more than expected in August
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.4% last month after falling 0.2% in July. However spending on goods fell 0.5%, aided by a drop in receipts at gasoline service stations amid lower gasoline prices.
Core PCE price index rises 0.6%; up 4.9% year-on-year
Excluding food and energy, the PCE price index jumped 0.6% after being unchanged in July. The core PCE price index up 4.9% on a year-on-year basis in August after increasing 4.7% in July. The central bank last week raised its median forecast for core PCE inflation to 4.5% this year from its previous estimate of 4.3% in June.
Consumer spending to remain moderate, with wage growth showing signs of slowing.
Wage growth is slowing as it increased 0.3% following a 0.8% rise in July.
Other
Personal income rises 0.3%; saving rate remain at 3.5%
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 7-10% 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
