3 Tips for Investors in a Government Shutdown

Of course, the really great news is that this article is already dated since, as of about 3 hours ago, the Congress approved a bill to avert the shutdown. Still, it's good to have this stuff for future reference. 

S&P 500 dips after US inflation data, ending weak third quarter

All three indexes opened well into the black but began an immediate decline such that by 1 pm all had slid into the red and kept sliding the rest of the day with a small glimmer of recovery in the final hour. The PCE numbers came in better than expected, in fact the lowest in two years, but still showing an elevated inflation picture. Today’s selling confirms that investors are finally waking up to “higher for longer” and the almost certain government shutdown come Sunday isn’t helping. For the month, all three indexes are down between 2.6 and 4.1%. Volume was a little above average at 11.3 billion but part of that was due to quadruple-witching from JP Morgan. 

Wall St ends higher as investors digest economic data ahead of inflation report

It was yet another seesaw today with the indexes up and down like crazy, but at least in positive territory, and the Dow up about 200 midday but then decline in the afternoon to close up 116.  A pause in Treasury yields has brought some relief and, as today’s expert put it, “A little bit of a counter trend rally is to be expected after three or four pretty sharply negative days.”  All are looking to Friday’s PCE report for an up-to-date picture on inflation with “growing anticipation that it won’t run hot.” Meanwhile, nerves are on edge over the increasing likelihood of a government shutdown. Volume was above the 4-week average at 10.7 billion. 

S&P 500 ekes out slim gain as investors weigh elevated yields

Wow, what a gargantuan sell off as investors continued to grapple with the new normal of high rates with all the indexes being down big time, the Dow in the red over 300 points.  That is, until about 1:30 when everything came back to almost break-even, excepting the Dow still down 68 at close, but that’s a lot better than down 320.  What happened at 1:30? A good guess per today’s expert, “At some point people will start to buy stocks for the fourth quarter, going to get back to thinking the fourth quarter might be a pretty good one.” If that’s the consensus that’s good news. It means the recent plunge has been an emotional one, not based on the data which is positive.  

Wall St pounded as investors grapple with higher rates

It was a big shot straight down today for all the indexes as investors continue to adjust their expectations given recent Fed remarks regarding continuing high rates. Today’s expert summed it up nicely, “We continue to adjust to higher interest rates, increasingly a sense that the market is overvalued, that this isn’t sustainable, buyers are being scared away.” The VIX closed at its highest level in four months. Triple digit losses all around with volume in line with recent averages at 10.2 billion. 

Wall Street posts gains as investors eye rate outlook

It was a seesaw day with all the indexes down in the morning but then building to modest gains by close. This illustrates the “tug of war between investors seemingly getting more concerned about ‘higher for longer’ and bulls wondering maybe we have seen the correction and can start to build from these levels higher.” There’s a lot of fence sitting going with investors waiting for data this week on durable goods, PCE and Q2 GDP. And still another Fed prez said today that fighting inflation to the 2% goal is less risky than slowing the economy. Though the S&P has slid more than 5% since late July, it is still up 13% for the year. Volume remains below average at 9.1 billion. 

7 Best Energy Dividend Stocks to Buy

Continuing on this weekend's theme of investing for income ...  

5 Best Short-Term Investments for Generating Income

Higher interest rates also mean better income generating opportunities and this week's edition of U.S. News Invested is dedicated to just that very topic. Enjoy the weekend.  

S&P 500, Nasdaq notch biggest weekly losses since March

The bad news is five days of losses in a row. The bad news is all three indexes registering their worst weekly losses since March as investors continue to digest the Summary Economic Projections that suggest that high rates will remain in place longer than expected. The good news is that the markets were actually up quite a bit until about 1 p.m. suggesting the digestion was done. It was likely at 1 p.m. that Fed Governor Bowman doubled down on previous Fed statements suggesting rates should be raised even further and then stay there for an extended period of time. 

US stocks close at lowest since June, Treasury yields spike on hawkish Fed

All the indexes continued on their post-2:30 pm decline from yesterday to spend the whole day in constant decline with the Dow and Nasdaq both in triple-digit losses over the mantra “higher for longer.” Another big contributor to the decline were four additional central banks from the U.K. to Switzerland following the Fed’s lead and hiking their rates.  (See chart below.) As today’s expert put it, “The headlines this morning were quite something when it came to central banks. All of them were hawkish.” A 9% drop in jobless claims also points to a labor market that remains too tight, pushing up wages and “ratcheting up the possibility that we won’t get a soft landing.”  Volume for once was a little above average at 10.76 billion. 

Stocks slide, US yields rise after hawkish Fed stance

Once again you can count the clock by the Fed as it was just around 2:30 p.m. that all the indexes took a big dive, which was likely right after the unexpected Fed announcement that policy would remain tight through next year and that there would also likely be another hike before the end of this year. The Fed remains committed to a 2% inflation target and the forecast not particularly encouraging as the Summary Economic Projections have PCE going to 3.3% vs a prior forecast of 3.2%.  They are leaving rates higher for longer to make sure to slay the inflation dragon. 

U.S. stocks close lower as investors take cover ahead of Fed decision

It was a down day all around but it was an especially down day for all the indexes until about 1 pm with the Dow plunging more than 300 points by that hour before all three rebounded to regain most of the losses by close. The sentiment is “risk-off” hedging bets against a big unpleasant surprise from tomorrow’s Fed. Whereas there are 99% odds of a continued pause on Wednesday and an increasing 70.9% odds of another pause in November, the real hesitation comes from Wednesday’s publication of the Fed’s Summary Economic Projections which will give the real story on inflation and whether the Fed will be planning rate cuts in 2024. If the pauses continue longer so rates remain higher than desired, that would be considered a hawkish position, not what the market wants. A plunge in housing starts added to the uncertainty. Volume remains below average at 9.6 billion. 

Wall Street moves sideways as investors look to Fed By Stephen Culp

All three indexes were on a big roll all day until about 1 pm, the Dow up over a hundred, then all three started a steady decline to end the day at break-even.  All are sitting on the sidelines awaiting the Fed’s report on Wednesday despite the now 99% virtual certainty of a continued rate pause. That aside, as today’s expert put it, “Powell can spark big moves in either direction with his comments and you don’t want to get caught on the wrong side of it.” 

9 Highest Dividend-Paying Stocks in the S&P 500

Again, U.S. News Invested has made their recent recommendations on the highest dividend-paying stocks for those who wish to invest for income.  Hope everyone had a great weekend.  

Great Investor Lessons

This week's WealthTrack features an interview with Steve Romick who has a Gold Analyst rating as he shares lessons he's learned over an illustrious 30 year career.  Enjoy the insights and have a great weekend.  

Wall Street tumbles, Treasury yields gain as focus turns to Fed

It was a stunning day for losses with all three indexes taking a big dive, and an especially big dive at about 1 p.m. The tech index took a big hit when Taiwan asked for a delay in chipmaking equipment and other reports were mixed showing rising import prices, rising industrial production, and a UofM survey showing consumer inflation expectations cooling. (See chart below for the consumer expectations.) The 7% odds of a September rate pause are holding and the odds for November have been raised to 68.5%.  Volume was almost double but that was likely the result of options expiry. 

Wall Street ends higher on economic data; Arm soars in debut

Good news all around shot all three indexes on a straight path up, the Dow and S&P gaining triple digits. Retail sales beating forecasts, unemployment benefits climbing a bit, and PPI rising 0.7% vs 0.4% provided the shot in the arm that the economy was now well positioned for a soft landing without being hot enough for more rate hikes. The consensus became “All together, it’s pretty bullish.” And Arm’s big debut provided more optimism, “Capital markets are open for business.” The for a September Fed rate pause now stand at an astounding 97% while a November pause has today risen to 67%.  Volume was right in line with the 4-week average at 10 billion. 

S&P 500, Nasdaq gain, Treasury yields dip as data firms Fed pause bets

Everything was up most of the day, the Dow up a hundred points in the morning, then all came crashing down rather abruptly around 2:30 p.m.  It was likely right around that time that the CPI data was announced showing that, though Core CPI (which excludes energy and food) was down ever so slightly, total CPI was up at its fastest pace in 14 months from surging energy prices. What was a very good day overall until the last hour turned into a very middling day with the Nasdaq and S&P up modestly, the Dow down modestly, and tech only warmed up because of the now 97% chance that rates will remain paused. See below for a chart of 5 inflation gauges and where they stand today.  Volume came in at 10 billion shares traded. 

Wall Street ends lower as Oracle tumbles on weak forecast

Tech got hit today with a combo of Oracle putting out a weak forecast and oil prices surging which always portends more rate hikes. Wednesday’s CPI and Thursday’s PPI will be watched carefully for hints on inflation and rate hikes. There remains a 93% chance of a continued pause in hikes for September and 56% for November. And will the ECB finally pause rates on Thursday after 9 consecutive hikes? $36B shares of Tesla were traded, but with more selling than buying brought it down 2.23%.  Volume remains light at 9.4 billion. 

Wall Street rises as Tesla soars on AI optimism

The indexes all started way up, the Dow up some 200 at open before almost immediately diving until noon, the Dow down to breakeven but the others still fairly well in the black. The afternoon session saw much better with the Dow regaining half of its ground by close and the tech-heavy S&P and Nasdaq doing considerably better.  The afternoon was saved mostly by a 10% rally from Tesla which received its boost after Morgan Stanley said its market cap could increase by $600 billion.  This pushed up the other megacaps but, though investor sentiment is up expecting optimistic CPI and PPI reports this week, but consumer sentiment was down as views about inflation showed expectations of continuing high prices and bleak personal finances.  Volume remains light at 9.3 billion. 

Guidelines for Selling Stocks

The latest from the AAII:  How To Sell Stocks.  Including knowing where the exits are.  Hope everyone had a great weekend.  

Market Reset

This week's edition of WealthTrack raises the question that, after years of poor fixed income performance and advisors cautioning clients to avoid the tradition 60/40 stock/bond allocation formula, with the massive change in fixed income returns that traditional "safe assets" are back. So perhaps it is time to reset our portfolios.  This issue gets discussed with Mark Cortazzo who calls for a major realignment in portfolios. Enjoy the weekend.  

Dollar has 8th straight week of gains; U.S. stocks edge up

All the indexes were up, the Dow over 100 points, until about 2 pm, then came crashing down with everyone except the Dow closing only modestly up, basically at break-even, but the cyclical Dow still up 75, which is what happens when the market gets nervous about tech. Once again, strong economic data added to the skepticism that inflation is being tamed and that the Fed will keep rates steady for longer than the market wants. 

S&P, Nasdaq fall as Apple drags, jobless claims data fuels rate jitters

The traditional Dow did okay but tech had a bad day as China put curbs on iPhones, requiring some state employees to stop using them at work. This created an immediate panic causing Apple to fall nearly 3% and Apple suppliers to fall 7%, China being such a huge part of the market and equities in general. The Philly tech index fell nearly 2%, the S&P tech 1.6%. 

Wall St slides as economic data stokes inflation and interest rate worries

All the indexes took a big dive in the morning, the Dow down some 300 points by 1 pm before beginning a turnaround and recapturing a hundred points before close.  The Purchasing Managers’ Index came in 2 points higher than expected suggesting a still too hot economy and sending waves of skepticism that inflation is not being tamed and that rate cuts are not forthcoming. 

Wall St slips as Treasury yields rise, oil prices boost energy sector

All the indexes spent most of today’s session in the red, the Dow closing down 195 points with the rise in Treasury yields providing the market with a good alternative to stocks. Today, confidence was waning that the Fed would continue on its friendly course, as today’s expert put it, “Everybody’s been expecting the Fed to step aside or start cutting rates. That might not be the case.”  

10 Best Investments for 2023

To close out this holiday weekend continuing with our theme of best investment opportunities, here's yet another list.  But the headline is a bit deceiving. It's not really about the 10 best investments, but about the 10 best investment areas, which means it's really a very concise mini-course on general investing. Click on the link for the entire course.  Hope everyone had an enjoyable holiday. 

10 Best-Performing Stocks of the Past 30 Years

For the benefits of your labors for this Labor Day weekend, this is a list from U.S. News Invested of the top stocks of the past 30 years that have had the best returns, meaning basically that you cannot lose with any of them.  Enjoy the holiday.  

Will the Stock Market Crash in 2023? 7 Risk Factors

Per Friday's edition of U.S. News Invested, here is what 50 leading economists say are the major risk factors for going into recession later this year. I don't really agree with all of them but I submit them anyway for your consideration. But aren't the major pre-indicators of recession when consumer spending falls (which it hasn't) and unemployment rises (which it has, but in this case it's good news because the labor market has been much too hot for a long time now.)  Plus aren't most economists now predicting a soft landing? But as I said, for your consideration ... 

S&P 500 ends higher as jobs data fuels rate-hike optimism

All the indexes were way up in the morning, the Dow up some 220 points, before all went into a dive around 10 a.m. reaching break-even around noon, then begin a slow rise for a modest gain on the S&P, the Nasdaq still a wash, the Dow still up 115 at close.  The employment report again reinforced optimism for a rate pause for which the odds in September now stand at 93% vs 80% on Monday. For the week, the indexes were all up between 1.4 and 3.2%.