Wall St gains over 1% after encouraging inflation data with Fed next

All of yesterday’s hedge betters had a heyday today when the labor costs report showed the slowest growth in a year, thereby causing a hefty 3-digit buying spree that the Fed’s program is working and we’re rounding the corner on rate hikes. The next hike will be announced tomorrow and is expected to be ¼ point. The busy week ahead includes heavy hitters Apple, Amazon and Alphabet as well as Europe’s bank meetings and the U.S. employment report.  Volume was a little above average at 12 billion. 

Tech, megacaps drag Wall St to lower close as big market week kicks off

It’s going to be a big week, a week that today’s expert has described as “The market has had a big run and the trading is a bit more cautious heading into a week which likely will be an inflection point for the overall market.”  Evidently in anticipation that it may not all be great news, investors are hedging their bets and/or taking profits sending all the indexes down, the Dow a hefty 260 points. Despite this initial skepticism starting off the week, the S&P is still heading for its biggest January in four years. 140 of the S&P have now reported and earnings are still expected to have fallen 3 percent. All this means is that if there is disappointing news in the next several days, it’s already priced it.  If not, we’ll be seeing another rally. Awaiting the news, volume was below average at 10.6 billion. 

Overcoming U.S. Investment Risks

To close out the last weekend of January, this latest edition of WealthTrack deals with a topic that never goes out of style ... 

7 Best Semiconductor Stocks to Buy for 2023

For those who are interested in riding the tech wave ... 

Wall Street ends higher, notches weekly gains as Fed meeting looms

All the indexes spent a little time in the red this morning, the Dow down about 120 points until about 10 a.m. when it zoomed up some 330 points by 3 pm, then dove again precipitously to end the session near break-even. The S&P followed suit with the Nasdaq faring better with a gain of 109 at close.  After a terrible third week, the market came back strong for the final week of January.  As today’s expert put it, “It’s a realization that inflation continues to come down quickly and that is alleviating a lot of worries regarding the economy.”  

Wall Street closes green as GDP data eases recession worries

After a choppy start to the day, it was a shot straight up after about 11 a.m. when a number of reports were issued showing that Q4 GDP and general economic health was stronger than expected. But it was a mixed consensus with experts saying the data supports both points of view that growth is slow enough to put the Fed on hold, but also that growth is too much for the Fed to back off, with the conclusion being, “Hope is not an investment strategy. The economic facts could soon weigh on the market.”  

S&P 500 closes slightly red as weak corporate guidance fuels recession fears

A slew of disappointing Q4 reports sent all the indexes way down in the morning, the Dow down some 460 points by 10:30, with the market slowly recovering to only very slight losses by close, the Dow even eking out a sliver of a gain.  The anemic earnings confirmed fears that the rate hikes are impacting corporate health and leading down the path to recession.  But then throughout the day sentiment changed as investors realized that the dour forecasts also meant that the rate hikes were working to tame inflation and that was currently more important than earnings.  On the Q4 front, nearly 20% of S&P companies have reported with 67% beating estimates, but well below the 76% average of the past year.  Volume came in at 10.89 billion, just a tad above the 4-week average. 

S&P 500 ends slightly down after mixed earnings, opening glitch

The Nasdaq and S&P suffered minor losses in today’s session while the Dow managed to break into positive territory in the afternoon session. It doesn’t happen often but a computer malfunction momentarily caused chaos and triggered wild trading swings. The problem was corrected quickly but it tainted the day’s results. 72 S&P companies have now put in Q4 reports with 65% beating estimates, very close to the longterm average. Reports continue showing that the Fed rate hikes are working to dampen demand which in turn is curbing inflation and building more confidence that the Fed will let up sooner than later.  At 10.58 billion, volume was right in line with recent averages. 

Wall Street extends rally, powered by tech bounce

The indexes were up all day, the Dow some 400 points as late as 2 pm before it began a slide to close up 254.  With major industrial earnings reports due this week and a 99% expectation of a smaller ¼ point rate hike next week, interest in the beaten down tech sector has revived with the coming lower hikes from the Fed and the consensus that inflation is coming down. But Q4 earnings will tell the real story, so far with over 10% of the S&P reporting and 63% beating estimates. 

Historical Cycles Disagree With Wall Street

More food for thought from Heritage Capital Management. Hope everyone had a good weekend.  

7 Best Monthly Dividend Stocks With High Yields

And for your weekend reading pleasure, here are 7 more recommendations for high-yield dividend stocks for those interested in investing for income.  Enjoy the weekend.  

Wall Street rallies to end higher on Alphabet, Netflix lift

The doom and gloom has lifted, at least for one day. All the indexes shot up big time today, the Dow gaining 330 points, with the beaten down Nasdaq gaining more than 2% with heavy hitters like Google, Microsoft and Amazon improving bottom lines with big job cuts. But after all the pessimism related to recession fears, the prognosticator who had been the lone wolf attributing the recent sell off to simple profit-taking proved to be correct today.  As our expert put it, “We had three down days so they are doing just a little bit of bargain hunting today. If people are viewing an opportunity, investors are starting to buy into the Fed’s narrative.”  If that is true, it may mean that investors are also buying in to the “no recession” part of that narrative.  It also helped that Fed Governor Waller commented that rates are “pretty close” to being sufficient to cool inflation.  Volume came in above average at 11.9 billion. 

Wall St slips as labor market data fuels Fed worry

The doom and gloom continues for a third day with yet another 3-digit loss in the Dow and the other indexes following suit. But most of the turmoil happened after 2:30 p.m. when the market, down only 80 points at that time, took a sudden nosedive, though it had been down over 300 points earlier around noon.  The trigger today was still another labor report showing the job market still quite strong despite the rate hikes and jobless claims were lower than expected meaning the market remains solid despite all efforts to stifle demand for workers. 

Wall St sinks after weak data, hawkish Fed comments

The Dow has now suffered a 2-day 1,000 point 3% loss and the other indexes did not fare much better.  Yes, it was nothing but doom and gloom today as more data showing a weakening in retails sales, producer prices, and factory output – data that is good news on the inflation front – also aggravated recession worries as investors now understand that bringing prices down comes with other costs. The cynics abound as with just two bad days in an otherwise positive month, they are so quickly jumping to the conclusion as expressed by today’s expert, “Investors may have held to this false belief that this soft landing scenario was a higher probability event than it actually is.”  

Goldman, Travelers drag Dow lower as earnings season picks up

It was a shot straight down right out the gate for the Dow and then stayed down all day long to close 391 in the red.  Today it was disappointing earnings from the big banks, namely Goldman Sachs and Morgan Stanley. There was also a report on declining manufacturing which should have heralded good news on lowering inflation but instead triggered the all too familiar tug of war between inflation and recession.  More Q4 is needed to evaluate the demand environment as the earnings bar is now set so low that companies could well beat expectations.  Volume came in at 11.1 billion. 

UNIQUE FINANCIAL PLAN

Another interview of another investment strategy that may be well worth a look as we close out still another long holiday weekend.  

7 Dividend ETFs for Retirement Investors

Continuing on the topic of appropriate investments for retirees, here's another recent list of recommendations from U.S. News Invested.  

6 Smart ETFs for Low-Risk Investors

More pearls of wisdom from this week's U.S. News Invested.  

S&P 500 ends at highest in month, indexes gain for week as earnings kick off

Opening nearly 300 points down, the Dow immediately gained traction and rose all day long to yet another 3-digit gain for a fourth day in a row.  The banks, which were expected to show lower Q4 earnings, instead surprised with JP Morgan and BofA coming in above while Wells Fargo and Citigroup fell short.  Still, the results boosted the bank index by 1.6% and the S&P to a 2.7% gain for the week.  As expected, the banks had stockpiled rainy day funds as a hedge against recession and investment banking reporting was weak.

Wall St ends up as data suggests inflation may be on downward trend

Today’s CPI report told investors exactly what they wanted to hear – inflation is coming down.  Prices fell for the first time in 2-1/2 years and that bolstered another handsome 3-digit gain in the Dow and puts the odds of a ¼ point February rate hike at 91% vs 77% yesterday, after a flurry of ¾ point hikes last year and capped by a ½ point hike in December. Today’s expert states, “The CPI data confirms inflation in a downward trend and that it has reversed.”  Volume was above average at 12.14 billion. 

Wall Street ends sharply higher on optimism before key inflation report

It was a straight shot up on all three indexes as optimism continues that Thursday’s CPI report will show inflation continuing a downward trend, spurring more optimism that it will bring a pause in rate hikes sooner than later. The market is up so far this year but, as today’s expert put it, “any time you have a down year, it’s not surprising to have a reversal at the start of the new year.” The banks will begin Q4 reporting later this week and are expected to have lower quarterly earnings. Volume was a tad above average at 11.4 billion. 

Wall Street ends higher, Powell comments avoid rate policy

Today all it took to zoom the Dow and Nasdaq up to 3-digit gains was for Powell to keep his mouth shut. The old saying “no news is good news” is precisely what drove the market today when Powell refrained from even mentioning rate policy in today’s speech. “Good news” is exactly how his sparseness of commentary was taken today sparking hopes that if Thursday’s CPI report is also good news that it might get the Fed’s attention on inflation which shows some indication of slowing significantly.  Also big on the radar are the big banks due for their Q4 reports later this week. The forecast is currently for a 2.2% decline in earnings for Q4.  Volume was below average at 10.02 billion. 

S&P 500 near flat as investors weigh chances of less aggressive rate hikes

The indexes were up, way up, most of the day, the Dow reaching a height of +300 by noon, before beginning a steady decline to break-even by 3 and closing down 112.  It was profit-taking in the morning reacting to Friday’s jobs report and then bet hedging in the afternoon anticipating a less than stellar CPI report later this week.  The consensus remains for high 77% odds of another ¼ point rate hike in February.  Volume was a little above average at 11.3 billion. 

2023 Investment Outlook: When Will the Stock Market Recover?

With the new year now just out the gate, this week's edition of U.S. News Invested is particularly relevant for Big Picture enthusiasts as it offers insights on the new year's prospects for a market recovery.  Hope everyone has enjoyed their weekend. 

POWERFUL INVESTMENT THEMES

To start this first weekend of the new year, this latest episode of WealthTrack features a discussion with one of Wall Street's leading experts on the macro factors that are impacting the market.  Enjoy the weekend.  

Wall St rallies as jobs, services data calm rate hike worries

Whoosh! What a day! In what is being called a “win-win,” a strong payrolls report coupled with easing wages and a contracting services sector signaled decreasing inflation and once again sparked optimism that the Fed’s tightening may be nearing an end, thus also relieving recession anxieties. Thus, the first week of the year ended with a bang with all the indexes ending more than 2% up.  Another big clue comes next week when the big banks start Q4 and then we begin finding out whether earnings estimates have been overstated (bad news) or where they are where they should be and already discounted (good news.)  Volume was a tad above average at just over 11.1 billion. 

Wall St drops more than 1% with jobs data feeding fears of more Fed tightening

Yesterday’s very slight hint from the Fed minutes generated optimism about rate cuts but today’s very strong jobs report quashed that optimism and sent the markets straight down all day, the Dow losing 339.  Two Fed governors this morning stressed that policy tightening would continue while Bullard of St. Louis said there could be some relief this year. The more detailed non-farm payrolls report is due Friday. Volume was a bit below average at 10.2 billion. 

S&P closes higher after Fed minutes confirm inflation focus

It was a volatile day with the Dow swinging back and forth in a 400 point range between red and black several times before closing 133 in the black, as did the other indexes.  Today the parsing of the December Fed minutes brought a ray of hope in the sentiment that, though there was certainly a commitment to further rate increases, the hopes of future rate cuts were at least hinted at.  As today’s expert put it, “The market still thinks it’s going to get ice cream, just not as soon as they thought before.”  Today’s jobs data showed a continuing strong labor market but there was also the positive of shrinking manufacturing. A little hope is all it takes these days to create a buying spree.  Volume was above average at 11.3 billion. 

Wall St starts the year with a dip; Apple, Tesla shares drag

After very briefly opening in the black, the Dow up about 240 points at 9:40, all the indexes began to dive almost immediately, the Dow sinking over 500 points by noon.  Then began a steady rise all afternoon for the Dow to close down just 10 as well as modest losses across the board. As today’s expert put it, “2022 was a terrible year for equity markets. Some of the reasons for that haven’t dissipated. There’s still elevated anxiety, uncertainty about the Fed and inflation. Until there’s clarity, it’s going to be tough to make any upside headway.”  

7 S&P 500 Stocks With the Biggest Stock Buybacks

To close this holiday season, a final tip as we head into a brand new trading year tomorrow.  

A Brief Commentary on the S&P in 2022

I rarely editorialize on this blog but there’s been something going on in the market the last six months that I finally do have to comment on.  With Friday having been the final trading day for 2022, we learned the dire news that the market had seen its biggest declines in 2022 since the financial crisis of 2008.  The S&P is down 19.4% for the year, 33.1% for the Nasdaq, the Dow 8.9%.  But I have been following the S&P with particular interest in the last two quarters specifically because of the hullabaloo the financial wizards were making at the end of June.  You may recall the end of June.  The S&P had suffered consecutive losses in the first two quarters.  And do you recall what all the wizards were saying at that time about those losses?