MARKETS TODAY Nov 7 (Vica Partners) – The S&P 500 up 0.35% as of 10.15 a.m. Eastern. The Dow Jones Industrial Average up 171 points, or 0.53%, to 32,574. The tech based Nasdaq up 0.11%.
Stocks moderately up Monday morning as the three major stock market indexes slightly rising, the 10-year Treasury yield flat at 4.184%, the 2 year Treasury yield flat at 4.72%, and the U.S. Dollar Index (DXY) down at $110.45. -0.39%. Oil prices flat with Brent crude $98.36, -0.15%, and US West Texas Intermediate flat at $92.54, -0.08%.
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.
What to expect from the US interest rate obsessed equity markets (today, not much news)
Monday includes, Consumer credit (level change) and Richmond Fed President Tom Barkin speaks on inflation.
Thursday is biggest the day for reports out this Week
Tuesday – Election Day, Thursday – Consumer Price Indexes (CPI), Jobless Claims, Earnings, Federal Budget. Note that data that shows the U.S. economy isn’t slowing as the central bank tightens policy will test lower stock prices.
Notable momentum reporting and performance
Energy Sector Performance / Industry Oil And Gas Production Industry 5 days + 7.17%, 30 days +12.77%, 90 days +54.09%, YTD +69.89%.
- Industry Leader: Apache Corporation (APA) 5 days + 10.43%, 30 days +18.96%, 90 days +63.62%, YTD +78.90%
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. And.. 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 and 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
