MARKETS TODAY Nov 16 (Vica Partners) – The S&P 500 down -0.66% as of 10:45 a.m. Eastern. The Dow Jones Industrial Average up 19 points, or +0.06%, to 33,611. The tech based Nasdaq down -1.47%.
Markets sluggish Wednesday early in the trading session with major stock market indexes mostly down, the 10-year Treasury yield flat at 3.749%, -0.05%, the 2 year Treasury yield flat at 4.368%, +0.007% and the U.S. Dollar Index (DXY) flat at $106.33, -0.07%. Oil prices down with Brent crude $92.65, -1.29%, and US West Texas Intermediate down at $85.29, -1.88%. Crypto measure Bitcoin at $16,395, down -2.88%.
Retail sales posted the biggest increase in eight months in October.
Retail sales increase 1.3% in October as analysts forecast of 1.2% however retail sales excluding vehicles rose 1.3% on a forecast of 0.6%. The S&P 500 and the Nasdaq fell following the report release.
The US yield curve is now the most inverted it has been since 1982
A closely watched metric that indicates further restrictive policy can damage the economy. Key Federal Reserve Presidents have already reaffirmed that 2022 policy tightening is ending.
Continue to watch S&P 4,000 level benchmark
The S&P 500 is on its 200-day moving average. The line has been a resistance level for the index, most notably in April and August and can indicate a breakout.
Keep in mind that the stock market typically performs well in November…
The stock market typically performs well in November… November is tied with April for being the second-best month of the year, with the Standard & Poor’s 500 rising 1.5% on average during the month since 1950. Election Data over the past 78 years shows that party control over either chamber has relatively little to do with long-term changes in the broad S&P 500 stock index
Notable earnings today
Target (TGT) reported profit declined by close to 50% and warned of soft holiday quarter; the company also said Wednesday it plans to cut up to $3 billion in total costs over the next three years. Earnings per share came in at $1.54 vs. $2.13 expected with revenue at $26.52 billion vs. $26.38 billion expected.
Vica Momentum Stock Report
Nextier Oilfield Solutions Inc. NYSE (NEX) NYSE (MPC) (Grade A) 50 Day Average +12.09%, 100 Day Average +6.47%, 200 Day Average +56.68%, YTD +187.32%. NexTier Oilfield Solutions is an oilfield service company with a diverse set of well completion and production services. NexTier Oilfield Solutions, formerly known as Keane Group Inc., is based in Houston, United States.
IMPORTANT TO READ; Low interest rates will return!
The Federal Reserve gave guidance that back in August of 2022 that they would raise rates to 4% and have. Rate adjustments will drive down inflation and slow the pace of the economy. Company earnings will remain mixed with stronger support for Communication services, Consumer staples, Energy, Financials and Health care. As these sectors tend to perform well during recessions
Following 2022 we expect the Central Bank to begin to cut interest rates in late Q2 of 2023 to avoid an extended recession. As the cure for inflation is not just raising rates. Vica analysts 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 still 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.
Look to Communication services, Consumer staples, Energy, Financials and Health care as these sectors tend to perform well during recessions
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 6-8% valuation correction for speculative stocks. DON’T try to time market lows!
*** Watch for our emerging 30/ 60/ 90 day Sector and leading company watchlist’s
*** 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 is already regaining strength
*** Banks will profit from higher interest rates on new loans and other products which will offset defaults
