Top Quality Income Performance

As promised yesterday, last night's post was dedicated to high risk, high profit stocks. Tonight's post is from this week's episode of WeathTrack in which Consuelo Mack talks to Clare Hart of JP Morgan's Equity Income Fund for a more conservative strategy involving investing for income rather than growth. Hope everyone enjoyed the weekend.  

7 High-Risk Stocks For Aggressive Investors

This weekend's extracurriculars will revolve around the themes of risk and safety.  Today I present this week's article from U.S. News Invested, for those of you who are risk-on, featuring their seven best pics of high payoff stocks for those who prefer profits over safety.  Tomorrow I will present a list of much more conservative stocks designed for those who prefer income over growth.  Enjoy the weekend.  It's going to get wet soon. 

Wall Street surges to sharply higher close ahead of Fed week

Even though it’s not quite the last trading day of the month, today’s enormous rally is already giving October the moniker of being “the best month in the history of the Dow.”  That’s quite a lot of hyperbole but at least does highlight the fact that economic data and earnings outlook is looking very positive and once again fueling a risk-on appetite.  Contrary to last month’s consensus that the door to lower rate hikes was slammed emphatically shut, today they’re putting even odds that rate hikes will begin to slow as early as December.  

S&P 500, Nasdaq slide, while Dow ends higher on mixed earnings picture

Tech continued to take a hit with Meta, following Microsoft and Google, plunging 24.6% and with Amazon plunging 12% after the bell and losing over $100B in value in just one day, there will likely continue to be a tech plunge on Friday. But there was good news on GDP as well as data showing Q3 inflation holding steady which held out further hopes that a winnowing of rate hikes may be coming as soon as December, the odds now at 55 percent. That shot the Dow up some 500 points this morning but that was followed by a steady decline all day to close up 194.  

S&P 500 ends lower, snapping rally on mounting slowdown fears

With Microsoft and Google foundering in after hours trading yesterday, there was a consensus that today the market would fall.  Indeed, after a promising morning with continuing soft data still supporting hopes for a Fed slowdown, the two megacaps brought everything down. The Dow was up over 330 points by 11 a.m. but quickly crashed the rest of the day to close at break-even.  Tech, of course, was hit much harder as was the S&P. 

Wall St extends rally on signs of ebbing Fed rate hikes

For the third straight day the big rally continues with soft economic data bolstering investor hopes that since the Fed policies to tame inflation appear to be working that a pullback in rate hikes may be in our near future. Today’s reports showing sliding home prices and souring consumer confidence were taken as evidence of abating Fed hawkishness.  But on a negative note, post-bell bad Q3 reports from Microsoft and Google raised expectations that the market will fall on Wednesday.  But today’s results were good enough to raise the Q3 earnings forecast to 3.3%, up from 3% yesterday but still far below the 4.5 from early October. Volume was above average at 11.9 billion. 

Wall St closes sharply higher on hopes of abating Fed

In normal times a slowing economy would be bad news but these are not normal times.  Indeed, the slowdown is very indicative that the Fed’s program to cool down the economy and stem inflation is working and it is this new hope that began Friday and continued in earnest all day today that shot all the indexes way up again, the Dow 417 points, all in the hopes that the cooling data will also come with slower rate hikes, maybe as soon as December. Q3 earnings growth is still projected at 3%, down from 4.5% in early October and way down from the 11% from early July. As of today, 20% of S&P companies have reported and about 75% of those have beaten estimates. And there’s a whole slew of heavy hitters coming this week.  Volume was a little above average at 11.8 billion. 

15 of the Best Dividend Stocks to Buy for 2022

And to cap off this beautiful weekend, the latest edition of U.S. News Invested once again has its most current recommendations for those who invest for income.  

New Cryptocurrency Scam - Pig Butchering

Here's something different for your weekend reading, the latest in cryptocurrency scams courtesy of our Michigan Attorney General's office, an email list that anyone can get on just by going to the Oakland County website and signing up for it and any of dozens of other newsletters including the latest local COVID updates.  

Wall Street ends higher as hopes for less aggressive Fed grow

For the last two days despite great Q3 reports the markets were overwhelmed by fears of rate hikes and recession and thus tumbled. Today, despite poor Q3 reports, the markets were overwhelmed by Fed hints that an easing of rate hikes may be in the near future and thus soared. The Dow started the day down about 130 points but then almost immediately started climbing to a total of nearly 900 points to close up 748.  So this confirms either that rate hikes are more important than earnings or that the market is just plain fickle and unpredictable. I vote for the latter.  Volume was above average at just over 12.1 billion. 

Wall Street ends lower as Fed worries outweigh earnings

It was a repeat of yesterday but only more dramatic with all the indexes way up in the morning, the Dow some 400 points, all on the strength of great Q3 reports until, just like yesterday, it all came crashing down on fears again of rate hikes and recession all to close in the red again, almost exactly the same amount as yesterday. The main concern, as today’s expert put it, “I’m not sure we’re going to be able to see that pause,” that is the pause in rate hikes that some Fed governors and investors are still banking on.  

Equities close lower as rise in yields overshadows earnings

After being up some 140 points in the morning, the Dow along with all the other indexes took a sudden and persistent dive around 11 a.m. hitting a session low some 300 points down by 1 pm before reversing course and closing down just 100.  This was despite the fact that there was mostly good news today, good Q3 reports with Netflix leading the charge with some 2.4 million new subscribers heading for 4.5 million by year-end, the Fed’s Beige Book showing some inflation easing and a cooling labor market and more evidence that the overall economy was cooling with housing starts down some 8.1 percent last month. But the one bit of bad news – Treasury yields hitting a 14 year high – thereby sapping all the other good news. But the better news, as stated by today’s expert, “ultimately good earnings will lead to stocks going higher.”  But today’s news was good enough to boost the Q3 earnings forecast in just one day from 2.8% to 3.  Volume was a little below average at 11 billion. 

U.S. stocks extend rally, Treasury yields dip after solid earnings, economic data

It was another volatile day with the Dow up over 650 points in the morning, then falling to a +100 before noon, and a couple more ups and downs before rising in the final hour to close up 337 points. The other two followed much the same pattern for a second consecutive day of an impressive rally.  As the sentiment goes, “the market was a bit oversold leading into Monday.”  But the more dominant sentiment became “better than expected quarterly results” which has been the trend for years now, that and a nice jolt from positive industrial output.  But the best sentiment – “The belief that a recession is coming and the Fed is going to be raising rates is now baked into the market.” 

Wall Street rallies after BofA results, UK reversal

Why is everyone so surprised that the banks are turning in good solid Q3 reports due to benefiting from higher rates?  Banks always benefit from higher rates, one of the few industries that do. It would be a surprise if their Q3 had been bad!  But that’s what happened today with BofA turning in solid results along with fellow bank NY Mellon as well as good news from Britain’s new finance minister.  The good news bled over to Goldman Sachs, though their report doesn’t come until Tuesday, and to the whole banking sector which was boosted nearly 3.5% and by extension to all the other 11 sectors.  In other words, as today’s expert put it, “any type of good news in the margin can go a long way.”  All three indexes were way up all day, the Dow a whopping 550 points.  Volume was below average at 10.6 billion. 

Capital Allocation Focus

From this week's WealthTrack program comes an important investment tool that is largely ignored by most, except by this week's guest, David Giroux, who is an expert in picking winning stocks using Capital Allocation models.  Enjoy ... and profit.  Hope everyone had a great weekend.  

7 Best Long-Term ETFs to Buy and Hold

From Friday's edition of U.S. News Invested, 7 top ETFs for your consideration during the wonderful autumn weekend.  

Wall St drops as consumer data stokes inflation worry

It was worsening inflation vs improving consumer sentiment that dominated the markets today and inflation concerns won the day bringing all the indexes way down again, the Dow 403 points.  This is despite positive retail sales data showing resilience which is always good but the new narrative that is beating all is that peak inflation is not evident yet. This confused me as I’ve been seeing reports for months now that inflation has been steadily if slowly decreasing since March which means we have seen peak inflation.  

Wall Street ends up 2% after sharp reversal; technicals help

With this morning’s CPI data coming in with bad news, all three indexes fell right out of the gate. But then investors must have given the issue a second thought because they evidently quickly concluded that the CPI numbers were already priced in and therefore it was a prime opportunity for snatching up bargains. After all, the CPI report, though not great at 8.2%, was after all just 0.1% above the forecast of 8.1% so, as today’s expert put it, “all we really need is things to be not as bad as suspected.”  

Wall St ends volatile day lower after Fed minutes, PPI

A very choppy day with the Dow up and down a dozen times or more during the session, but the good news is that for most of the upticks it was up 200 points or more, as was also true for both the Nasdaq and S&P.  Then all three indexes came crashing down in the final half hour to close very modestly in the red. Today’s market action illustrates just how fickle things have become – and how sensitive to any readings that don’t hit the bullseye as the PPI number came in at 8.5% and, even though it was expected at just 1/10% lower, and even though it was considerably lower than the 8.7% in August, it was still enough to send everyone into turmoil. 

S&P 500, Nasdaq end lower; BoE comments add to market jitters late

The Dow was up, way up, some 400 points way up, until about 2 pm, then came crashing down in the next hour to close up just 36. The other two also crashed big time around 2 pm but settled more deeply in negative territory.  So it must have been right around 2 pm that the Bank of England pulled the rug from under everyone when, after reporting early Tuesday that their bond support program would be extended until at least the end of the month, then later announcing it would end instead on Friday. There was the additional bad news coming from the IMF that U.S. growth would be a measly 1.6% this year. Stocks continue to underperform as a hedge against inflation data later this week and whether it will stop the Fed’s rapid rate hikes. Volume was very close to the 4-week average at 11.6 billion. 

Nasdaq registers lowest close since July 2020; chips stocks fall

The Dow was up almost 200 points right out the gate but then fell almost 500 points by 1 pm only to rise to break-even by 2 pm, then rise and fall again twice by 3:30, then fall again in the final half hour to close nearly 100 down again. So even though it looked like a lackluster day, it was actually quite volatile as the other indexes more or less followed suit with the Nasdaq reaching its lowest close in over two years.  There was a lot going on today, not the least of which was the Fed Vice Chair commenting that the rate hikes may be slowing the economy faster than expected, exactly what investors feared.

Payrolls September 2022

Just to put things in perspective with the markets crashing so badly after the payrolls report came out Friday, here is a graph that shows the actual change in payrolls month by month for past two years, and particularly for this past September.  As you can easily observe, maybe the number did not come out as low as investors wanted them to, but they were certainly among the lowest of the last two years.  The point is, good news or bad, it's all relative.  

High Conviction Portfolio

It's when the market is really low that the best buying opportunities present themselves and David Giroux of T. Rowe Price's Capital Appreciation Fund and this week's guest on WealthTrack is an expert at it.  As pointed out below, though his fund has been closed to additional investors for capacity reasons, that doesn't mean that we can't still tap in to his expertise. Hope everyone is enjoying this nice autumn weekend.  

Wall Street ends sharply lower as jobs report cements rate hike regime

Today’s payroll report showed that the labor market remains quite vigorous which is exactly the opposite of what the market wanted for a strong resilient job market virtually guarantees continued Fed rate hikes.  There were about 5% more hires in September than forecast and to make matters worse, the unemployment rate, which everyone hoped would increase actually decreased to an almost historic low of 3.5 percent.  Thus all the indexes went screaming down and oddsmakers have now increased the chances of another ¾ point hike from 83% to 92 for a fourth consecutive such hike.  

Wall Street closes lower as the Fed pounds rate hike drum

As today’s experts have put it, the markets have been in a state of denial about future rate hikes and thus not fully grasped the possibility (some would say likelihood) of an upcoming serious recession. When there was a hint of the Fed scaling back, the markets went wild with a buying spree, which is what we saw Monday and Tuesday. And a little bit yesterday with a big rally after the huge morning drop, but not enough to put the indexes in the black.  The Fed has been pretty consistent and quite clear with their intention of continued rate hikes and today the Chicago Fed prez reiterated it all. So the indexes went straight down and stayed that way.  Tomorrow may see a glimmer of hope when the payroll numbers come in. And at least two experts see little or no danger ahead, especially Morningstar with the statement, “We are not forecasting a recession.” 

Wall Street ends down as two-day rally fizzles on data, Fed message

The Dow down almost 450 points by 11 a.m. before beginning an upswing that continued through the rest of the session to close very modestly 42 down.  So what’s going on? Well yesterday’s surge was triggered by excitement that new job opening had grown more slowly, in fact the smallest increase in 2-1/2 years.  Today, investors decided that despite the small increase, the labor market remains too strong to assure that the Fed will ease up at all.  But with the huge sell off that occurred early this morning, the market decided that the indexes had hit bottom and so started some furious bargain hunting.

Wall St rallies as data, RBA move lifts hope of Fed easing

It was second consecutive grand slam day with the indexes shooting way up on reports that the labor market was starting to cool, that the gap between the unemployment rate and new job openings was narrowing with openings falling by the most in 2-1/2 years, showing the Fed’s mission to bring down inflation was working. This brought new hope that the pace of rate hikes may start to slow even though the San Francisco Fed prez today said that we need more rate hikes. This is being called a relief rally rather than a new bull market but, whatever you call it, it is a relief coming on the heels of the worst September in 2-1/2 years and now we’re seeing the biggest one-day gain in the S&P in 2-1/2 years.  Volume was brisk at 12.5 billion. 

Wall Street closes with sharp gains as final quarter begins

It was yet another day when bad news was taken as good news with the manufacturing report showing the slowest growth in 2-1/2 years attributed to cooling demand which, in turn, tones down inflation which is a plus for equities. All three indexes zoomed on this “bad news,” the Dow up a whopping 765 points, almost making up all of last week’s losses. The only ridiculous statement was “This is the first time we’ve actually seen negative news be a catalyst.”  What!  Have they been paying attention since 2008? Bad news causing a buying spree has been more common than not since the Great Recession.  Treasury yields pulling back was another positive for stocks creating a more risk-on environment. Automakers have forecasted a modest decline in car sales and both Citi and Credit Suisse have lowered their year-end targets for the S&P.  Volume was a tad above recent averages at 11.6 billion. 

8 Best Biotech Stocks to Buy in 2022

For those of you who believe that, despite the recent market upset, tech still rules -- here are the latest recommendations from this week's U.S. News Invested for the best biotech stocks for 2022.  Hope everyone had a great weekend.  

Buying Into Fear

'Tis the season to be nervous; 'tis the season to be fearful. As I pointed out yesterday, September was an awful month. But if there is a silver lining in this dark cloud, Consuelo Mack explores it in this week's edition of her PBS program WealthTrack as she interviews Rob Arnott about an age-old strategy: when everyone else is selling, we should be buying.  In other words, buying into fear.  Hope everyone is enjoying the weekend.