MARKETS TODAY @1:16 PM EST
Sept 22 (Vica Partners) Dow down .38%, S&P 500 down .88%, Nasdaq down 1.56%
Indexes are down this morning following yesterday’s Federal Reserve three-quarters of a percentage point hike. The Fed signaled further “higher than analysts forecast” rate hikes were planned. The markets are pricing in the rate adjustment over the next 48 hours with Fed Chair Powell to speak today.
Rate facts you need to know….
- Investors had expected September 75 bps, with cumulative 4.20% by end of year. Yesterday the Central Bank communicated a revised 4.40% forecast for 2022.
- Terminal rate seen hitting 4.6% in 2023
- The Fed is setting expectations for 2 year inflation breakeven of about 2.3%
Jobless claims data today
First-time jobless claims came in at 213,000, below 220,000 estimates and in-line with the previous week.
Treasury Yields, Oil Prices
The 10-year Treasury rose to 3.65% Thursday, gaining back from Wednesday’s session. Treasury yields are still gaining, with the gap between 2-year and 10-year bond yields increasing.
Mid-day U.S. oil prices on the rise up .88%, at $83.67 a barrel.
Based on our data what we expect over the next few weeks
The markets are off about -3% in establishing prior index low S&P 500 at 3640. We still expect another 6% correction off that low, followed by a strong correction with index reversal around 3500.
VERY IMPORTANT TO READ as 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 drops include: iron ore -59%, copper -28%, crude oil -37%.
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 12%-15% 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
