MARKETS TODAY Nov 1 (Vica Partners) – The S&P 500 down 0.41% as of 4.00 p.m. Eastern. The Dow Jones Industrial Average down 80 points, or – 0.24%, to 32,653. The tech based Nasdaq down 0.89%.
The three major stock market indexes declined Tuesday, the 10-year Treasury flat with a yield at 4.048%. U.S. Dollar Index (DXY) was up at $111.55. Oil prices up with Brent crude $94.65, 1.98%, and US West Texas Intermediate $88.77, 0.45%.
Today the 2 year Treasury yield rose to 4.538% from a today’s low of 4.408%, which would indicate a rate hike is coming.
The September jobs report continues to indicate a tight labor market
For September, there were 10.7 million job openings, higher than the estimated 9.8 million and bests August’s revised 10.3 million.
U.S. business activity contracted for a fourth straight month in October, manufacturers and services firms reporting weaker client demand.
US ISM Manufacturing PMI is at a current level of 50.20, down from 50.90 last month and down from 60.80 one year ago. This is a change of -1.38% from last month and -17.43% from one year ago.
The Fed will announce a November rate hike its meeting early Wednesday afternoon
The markets are expecting another 75 basis point hike in November. Analysts will be watching Fed comments closely whether more action is needed to curb inflation. If so… expect bond yields rapidly rise and stocks to quickly fall.
Value is king and performance in key sectors remain strong (emerging 30 day Sector watchlist)
Rental & Leasing Industry +49.4%, Oil Well Services & Equipment Industry +42.8%, Iron & Steel Industry +20.1%, Biotechnology & Pharmaceuticals Industry +19.3%, Airline Industry +18.4%.
IMPORTANT TO READ as low interest rates will return
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 will rise “as there are 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.
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 5-7% 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
