MARKETS TODAY Nov 22 (Vica Partners) – The S&P 500 up +1.36% as of 4:00 p.m. Eastern. The Dow Jones Industrial Average up 398 points, or +1.18%, to 34,098. The tech based Nasdaq up +1.36%.
Markets gain in Tuesday trading session with all 3 key stock market indexes up, the 10-year Treasury yield down at 3.762%, -0.065%, the 2 year Treasury yield flat at 4.527%, +0.003% and the U.S. Dollar Index (DXY) down at $107.16, -0.62%.
Oil prices rally with Brent crude $88.49, +1.19%, and US West Texas Intermediate up at $81.13, +1.36%, Crypto measure Bitcoin nicely up at $16,079, +2.03%.
Market Pricing Rebounds as the Fed can’t Over-Hike and put the economy into a bad recession
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.
Markets do expect the Fed to raise its benchmark interest rate another 0.5 percentage point in December, rather than the three-quarters of a percent.
Markets will get updated durable goods orders, job claims, manufacturing PMI and home sales numbers tomorrow
Look for on-forecast reports/ data, however best to expect some increased volatility from lower volumes as traders take time off as the markets are closed Thursday for Thanksgiving, and shortened trading day on Friday.
Analysts continue to watch S&P 4,000 level benchmark, today closing at 4,004
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 +11% today.
Vica Momentum Stock Report
Liberty Energy NYSE (LBRT) (Grade A-) 50 Day Average +16.86%, 100 Day Average +33.36%, 200 Day Average +37.26, YTD +74.33%.
Liberty Oilfield Services Inc. is a premier provider of hydraulic fracturing and other auxiliary services to onshore exploration and production (E&P) companies in N. America. Hydraulic fracturing is a method used to extract oil and natural gas. Liberty acquired oilfield services giant Schlumberger’s onshore hydraulic fracturing business in the U.S. and Canada.
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
