MARKETS TODAY Oct 5 (Vica Partners) – The S&P 500 down 1.41% as of 11:30 a.m. Eastern. The Dow Jones Industrial Average down 335 points, or -1.09%, to 29, 988. The tech based Nasdaq down 1.94%
Technology stocks and retailers lead sector losses today while Treasury yields are back up. The 10-year Treasury is trading 10.7 basis points higher at 3.773% after falling below 3.6% yesterday. U.S. Dollar Index (DXY) up nicely at $111.53.
BIG NEWS is that Oil prices continue to rise with Brent crude +1.80% and US West Texas Intermediate crude +1.56.
Saudi Arabia announce cuts to oil output
The OPEC+ alliance announced a 2 million barrels a day cut in oil production Wednesday, which will drive oil and gas prices back up. Prices, which had reached up to $120 a barrel during the spring and dropped off due to recession pressures to less than $90 a barrel in September.
Early labor and manufacturing data this week sparked 2 day rally, however the markets are continuing to seek proof that rate hikes are curbing inflation.
U.S. private payrolls rise *ADP private payrolls increase 208,000 in September
| REPORT | PERIOD | ACTUAL | FORECAST | PREVIOUS | |
| *ADP employment report | Sept. | 208,000 | 200,000 | 185,000 | |
| International trade balance | Aug. | -$67.4 billion | -$67.7 billion | -$70.5 billion | |
| S&P services PMI (final) | Sept. | 49.3 | 49.2 | 49.2 | |
| ISM services index | Sept. | 56.7% | 56.0% | 56.9% |
The recent bounce is not signal the bear market’s end
October and November are particularly strong performing months during mid-term Election years however we have a still forecast further index and company valuation corrections,
IMPORTANT TO READ as we forecast that inflation will turn into deflation in 2023
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 6-8% 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
