MARKETS TODAY Oct 28 (Vica Partners) – The S&P 500 up 2.13% as of 1.40 p.m. Eastern. The Dow Jones Industrial Average up 777 points, or 2.42%, to 32,809. The tech based Nasdaq up 2.46%.
Stock indexes all up in session, the 10-year Treasury flat with a yield at 4.012%. U.S. Dollar Index (DXY) also flat at $110.90. Oil prices down with Brent crude $95.28, -1.73%, and US West Texas Intermediate $87.49, -1.78%.
Rise in U.S. consumer spending beats expectations and wages slow
Consumer spending increases 0.6% in September as the core PCE price index rose 0.5%; up 5.1% year-on-year. In addition employment cost index increased a modest 1.2% in the third quarter.
Apple sparks q4 consumer confidence today
Apple Inc. (APPL) earned $1.29 a share on sales of $90.1 billion in the quarter ended Sept. 24. Vica analysts expected Apple earnings of $1.28 a share on sales of $89.4 billion. On a year-over-year basis, Apple earnings rose 4% while sales climbed 8%.
- Apple’s iPhone revenue increased 10% to $42.6 billion. Smartphones accounted for 47% of the company’s total sales in the period.
- Apple’s Mac computer sales jumped 25% to $11.5 billion and revenue from Apple’s wearables, home and accessories unit rose 10% to $9.7 billion.
- Services revenue increased 5% to $19.2 billion. Services include the App Store, AppleCare, iCloud, Apple Pay, Apple Music
- Revenue: $127.1 billion actual versus consensus $127.63 billion
- Adjusted Earnings Per Share (EPS): 28 cents actual versus consensus 22 cents
& Chevron crush estimates; Chevron (CVX) reported adjusted earnings of $10.8 billion, or $5.56 a share, a 90% increase on the year-ago period but below the second-quarter’s $11.4 billion. Operating revenue was $66.6 billion. Vica analysts expected adjusted earnings per share of $5.06 and revenue of $61.5 billion.
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 will regain strength shortly
*** Banks will profit from higher interest rates on new loans and other products which will offset defaults
