MARKETS TODAY Oct 14 (Vica Partners) – The S&P 500 down 0.93% as of 10.40 a.m. Eastern. The Dow Jones Industrial Average down 125 points, or 0.42%, to 29,913. The tech based Nasdaq down 1.42%.
Stocks opened higher and since changed direction following Thursdays intraday reversal, the fifth largest from a low in the history of the S&P 500. The 10-year Treasury note yield up at 3.996%. U.S. Dollar Index (DXY) rising at $113.01. Oil prices negative today with Brent crude –2.61% and US West Texas Intermediate crude -3.11%.
Profit for S&P 500 companies increased 2.4% in the third quarter
Earnings growth was expected to be 10% for the period, rising costs have had margin erosion with more than 60% of the S&P companies issuing negative guidance.
Kansas City Federal Reserve President expressed caution Friday about the pace of interest rate increases
“The pace at which that policy unfolds is going to need to be carefully balanced against the state of the economy and the condition of financial markets particularly at a time of heightened uncertainty,” – Kansas City Federal Reserve President Esther George
The consumer survey from the University of Michigan out today show inflation expectations increasing
Americans’ expectations for inflation rose as well in October, reversing a decline in September. Preliminary results from a University of Michigan survey of consumers indicated that its index of consumer sentiment edged up to 59.8 in the first half of October. This is well above forecasts for an index reading of 59, higher than September’s 58.6 reading.
Note- The University of Michigan Consumer Sentiment Index is a consumer confidence index published monthly by the University of Michigan. The Index of Consumer Expectations (a sub-index of ICS) is included in the Leading Indicator Composite Index published by the U.S. Department of Commerce, Bureau of Economic Analysis.
The world’s largest investors continue to move money to private markets
Private markets refer to investments in equity and debt of privately owned companies.
How you invest in private market… you can purchase shares of an exchange-traded fund (ETF) that tracks an index of publicly traded companies investing in private equities.
Sector trends, and that sectors key company watchlist
Over the past 30 days the Energy Sector is up 3.21%, and up 23.96% for the past 90 days. Your 90 Day watchlist should include: First Solar Inc. (FSLR) +88%, Conocophillips (COP) +45%, Hess Corporation (HES) +36%, Peabody Energy Corp (BTU)+34%, Murphy Oil Corporation (MUR) +59%, Devon Energy Corp (DVN) +40%, Schlumberger Limited (SLB) +34%.
The services sector is up 3.66% over the past 90 days.
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 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 will regain strength shortly
