MARKETS TODAY Oct 3 (Vica Partners) – The S&P 500 up 2.59% as of 3:00 p.m. Eastern. The Dow Jones Industrial Average up 765 points, or 2.66%, to 29, 491. The tech based Nasdaq up 2.27%
The markets rallied today with the Dow up 765 points. Oil prices are BIG comeback with Brent crude +4.37% and US West Texas Intermediate crude +5.21%. Conversely, the 10 Year Treasury note dropping at 3.65% and U.S. Dollar Index (DXY) off at $111.65.
Economic reports out today included…
- The September ISM Manufacturing Index (insight on factory sector trends)
- Actual at 50.9, lower than the consensus estimate of 52.4.
- September PMI Manufacturing Index (measures month-over-month activity in the private sector in production, new orders, stock levels, employment and prices across manufacturing industries)
- Actual 52.0 vs. the consensus 51.8, showing stronger-than-expected sentiment.
Noteworthy
OPEC may cut oil production by 1 million barrels per day to give a boost dropping oil prices. Marathon Oil (MRO) led S&P stocks, up 10.6%. Dow Jones component Chevron (CVX) gained 5.7% in day trading and SPDR Select Energy ETF (XLE) gained 5.7%.
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 “even with production shortages” which include: iron. Copper and crude oil. Upside is coming!
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
