MARKETS TODAY Nov 23 (Vica Partners) – The Dow rose 153 points, or 0.45% to 34,347, it’s the third consecutive session of gains. The S&P 500 finished flat 0.03% at 4,026. The Nasdaq Composite was down 0.52% to 11,226.
U.S. stocks closed mixed Friday, in soft market volumes, as investors looked to the start of the holiday shopping season, while renewed bets on a softer stance on rate hikes from the Federal Reserve gave a boost to 3 key stock indexes this week.
The market numbers at glance
- All 3 key stock market indexes ended the week higher with the Dow up 1.78%, and the S&P 500 up 1.53% and the tech-heavy Nasdaq up 0.72%
- 10-year Treasury yield down at 3.691%, 0.018%, the 2 year Treasury yield up at 4.467%, 0.016%
- S. Dollar Index (DXY) down at $106.04, 0.04%.
- Bitcoin slips to $16,502, or 0.50%.
- Oil prices continue to fall with Brent crude $83.63 or 2.00%, and US West Texas Intermediate down at $76.55 or 1.78%
Fed minutes reveal that officials suggesting that slowing the pace of right hikes helping lift the markets this week
A soft-landing outcome is now possible and Markets are beginning to price in that the Fed will slow and pause interest rate hikes in order to protect the economy. The fed funds futures market is reflecting that a half percentage point rate hike for December.
Investors are also tracking signs of consumer strength from early Black Friday shopping
The National Retail Federation predicting an increase of between 6% and 8% in overall sales for the whole of the holiday period, which lasts to the end of December, to between $942.6 billion and $960.4 billion.
China’s renewed Covid crisis with daily infections rising
China’s Covid crisis reported rising to more than 31,000 yesterday, the highest since April 13, triggering new lockdown orders in major cities around the country.
Crude oil prices continued to slide in sessions are delivered their fourth weekly decline
Crude oil prices fell after the collapse of an EU plan to cap the price of Russian crude exports at between $65 and $70 per barrel.
The tech-heavy Nasdaq was down around 58 points from Wednesday’s close, on Apple (AAPL) news
Reuters reported Friday that officials at the Foxconn factory in Zhengzhou, which has been beset by both strict Covid restrictions and a series of employee protests over pay and working conditions, likely won’t be able to return the iPhone factory to full capacity until at least next month, with November output falling at ‘at least’ 30%.
S&P 4,000 level benchmark, today closing flat at 4,026
The S&P 500 is on its 200-day moving average. The line has been a resistance level for the index, most notably in April and August and can indicate a breakout. Since the late September lows the index is up +12% today.
Vica Momentum Stock Report
China Automotive Systems NYSE (CAAS) (Grade A) 50 Day Average +41.37%, 100 Day Average +117.45%, 200 Day Average +118.25, YTD +123.13%.
China Automotive Systems is a holding company and has no significant business operations other than their interest in Genesis in which they manufacture power steering systems and other component partsfor automobiles.
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.
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.
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
