MARKETS TODAY
Sept 15 (Vica Partners) – Dow down .56%, S&P 500 down 1.13%, Nasdaq down 1.43%
August’s higher-than-expected pace of inflation continued to weigh on markets today with early stock gains resulting in closing bell loses. Even though the Consumer Price Index (CPI-U) only rose 0.1 percent in August the market was betting on a drop.
Economists worry that August inflation data indicates continued price pressures and raises concern over more aggressive Federal Reserve rate hikes.
Investor perception is that corporate profits will continue to decline and expect a weaker economy in the next 12 months because …
Mortgage rise above 6 percent for the first time since 2008
Housing costs rose 0.7% in August and are up 6.2% year-over-year, the largest increase since 1991, fueling the concern for continued rate hike pressures.
Core CPI the increases were mostly offset by a decline in the gasoline index
Increases in the shelter, food, and medical care indexes were the largest of many contributors to the broad-based monthly all items increase. These increases were mostly offset by a 10.6-percent decline in the gasoline index.
The current price of oil doesn’t adequately reflect actual supply and demand and OPEC is aware of supply problem and that paper and physical markets don’t accurately represent what you would need to pay to acquire oil today.
Investors continue to withdraw funds form the market
Investors withholding cash levels rose from 5.7% last month to 6.1%, their highest level since the September 2001.
Solid strategy for these type of market days ….
We suggest investing in companies that have solid balance sheets and offer dividends.
Here is a list of some of our A- Tier value courtesy of Vpartners data scientists:
- MRK, UNH, TM, TSLA, C, MUFG, OXY, CTRA, DVN, CVX, XOM, NRG, AMZN, GOOGL, AAPL
- Breakouts from our behavioral data, not part of value UBER, NU, BABA, TOST, TWLO
Best to continue to cost average buy A-Tier value stocks and resist most of tech and growth stocks where companies have negative margins. Our teams still see a +10% valuation correction for speculative stocks.
*** Energy is the Top Performing Sector in S&P 500
*** S&P 500 Index ETF’s: FACT 17% of US large-cap stock pickers beat the S&P 500 over the past 10 years through 2021, and that number drops to 6% over 20 years. Source: S&P SPIVA
