MARKETS TODAY Nov 23 (Vica Partners) – The S&P 500 up +0.59% as of 4:00 p.m. Eastern. The Dow Jones Industrial Average up 96 points, or +0.28%, to 34,194. The tech based Nasdaq up +0.99%.
Markets gain in Wednesday trading session with all 3 key stock market indexes up, the 10-year Treasury yield down at 3.689%, -0.069%, the 2 year Treasury yield down at 4.473%, -0.044% and the U.S. Dollar Index (DXY) down at $106.10, -1.05%.
Oil prices fall with Brent crude $85.41 and US West Texas Intermediate down at $77.47, Crypto measure Bitcoin nicely up at $16,559, +2.22%.
Fed minutes reveal that officials suggesting that slowing the pace of right hikes
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.
Job claims and durable goods data reported today
Initial claims for unemployment benefits came in at 240,000 for the week above expectations for 225,000 indicating the case for a slowdown in rate hikes. Durable goods rose 1% in October from September, higher than the expected 0.5% gain but with no real impact on the market today.
S&P 4,000 level benchmark, today closing at 4,027
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
Caterpillar Inc NYSE (CAT) (Grade B+ ) 50 Day Average +28.31%, 100 Day Average +36.35%, 200 Day Average +17.58, YTD +14.60%.
Caterpillar Inc. is the world’s leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives.
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
