MARKETS TODAY Oct 17 (Vica Partners) – The S&P 500 up 2.61% as of 11.40 a.m. Eastern. The Dow Jones Industrial Average up 521 points, or 1.76%, to 30.156. The tech based Nasdaq up 3.32%.
Stocks opened to morning rally following Bank of America’s Q3 earnings beat. The 10-year Treasury note yield flat at 3.975%. U.S. Dollar Index (DXY) down 0.96% to $112.23. Oil prices negative slightly up with Brent crude 0.80% and US West Texas Intermediate crude 0.82%.
Expect key lenders to report better-than-expected Q3 results
Leading the way this morning amongst the Federal Reserve’s monthly rate hikes key lenders are profiting as Bank of America Corp rose 4.53% as the lender benefited from higher net interest income in its third quarter, even though it added $378 million to its loan-loss reserves.
BAC benefited from a higher interest rates in both the yields on the new loans and that their expanding the number of new depositors. Also this morning the Bank of NY Mellon Corp reported strong results sending its shares up close 6.00%.
Goldman Sachs, which will post results on Tuesday as they reported plans today to combine its investment banking and trading businesses. Look for continued strong margin growth from GS!
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
*** Banks will profit from higher interest rates on new loans and other products
