New Year's Resolutions From WealthTrack

Submitted for your consideration: financial New Year's resolutions courtesy of this week's edition of WealthTrack with Consuelo Mack, including yet another forecast for 2024, this time courtesy of her guest Ed Hyman of Evercore.  Happy New Year!  

10 of the Best Stocks to Buy for 2024

As we close in on the new year, here are the top recommendations for 2024 from U.S. News Invested.  

Wall Street ends slightly lower, capping blockbuster year

On all three indexes, there was a sharp selloff until about noon, the Dow plunging some 170 points, then recovering all afternoon with all closing with modest losses.  As today’s expert put it, “There’s really no reason for today’s small sell-off. I would ascribe it to last-minute portfolio changes, profit-taking as we enter the new year, and perhaps some rebalancing.” Overall though there was abundant good news. As the expert also said, “If I said [one year ago] I think the S&P is going to gain more than 20% in 2023, you would have put me in the slightly nutty category.”  This closing week of the year has seen all the indexes notch nine consecutive weekly gains, the longest such streak for the S&P in 20 years and 5 years for the Dow and Nasdaq.  

S&P 500 ekes out meager gains, flirts with bull market confirmation

It was mostly a green day on all the indexes with the Dow up some 120 points until the last 20 minutes when the whole market took a dive with the Nasdaq and S&P ending near break-even and the Dow maintaining a modest 53 point gain. There’s no real explanation given for the sudden last minute plunge but optimism nevertheless prevails. 

Wall St ekes out modest gains as S&P 500 hovers near all-time closing high

All three indexes seesawed like crazy between black and red all day, the Dow up almost 150 points by 1 pm, then dropping to near break-even shortly before close only to then zoom up in the final ten minutes to close up 111.  The others had the same pattern which points to a lot of fence-sitting and, as today’s expert put it, “Three days left of tax harvesting, three days of portfolio window dressing.”  The S&P is now just 15 points shy of its record close and reaching that benchmark will confirm a bull market which is important “for investors who are sitting on the fence.” Today the odds of a March rate cut are at 73.9% and volume is just a little below the 4-week average at 11.96 billion. 

Wall Street ends higher in final stretch of 2023, rate cuts in view

Following up on Friday’s good inflation numbers, it was yet another shot straight up on all the indexes as optimism continues riding high on rate cuts. The S&P today is only 22 points shy of ½% of its all-time high, 22 points shy of confirming its bull market. As today’s expert put it, “If inflation continues to move down in January and February, there’s a good chance that the Fed may cut rates earlier than anticipated.” Today the odds of a March rate cut are 72.7%. All 11 S&P sectors ended the day on the upside and all three indexes are heading well into year-end with monthly, quarterly, and annual gains. Being that it’s a holiday week, volume was light at 9.99 billion. 

The Oracle of Omaha: A Strategy Derived From Warren Buffett

To conclude this holiday weekend, here are words of wisdom from the AAII regarding the Oracle of Omaha.  Hope everyone had a great holiday!  

Will the Stock Market Crash in 2024? 7 Risk Factors

#2 of my series of articles this long holiday weekend giving investors a little heads up on what might be coming in 2024 in the markets and how to prepare for it.  Merry Christmas!  

Recession 2024: What to Watch for and How to Prepare

As we begin our holiday weekend, for the next three nights I will be submitting articles about what some experts think may be coming in 2024 and how to prepare for it.  

S&P 500 ends higher ahead of long holiday weekend

All three indexes were well into the black most of the day until about 2 pm when, in spite of a good PCE report that showed inflation coming down within reach of the Fed’s 2% goal, caution over the long holiday weekend set in which set everything spiraling down and with all the indexes closing near break-even. See the graph below for an eye-shot of inflation’s downward trending. But overall, optimism remains high, the PCE report was very dovish showing deflation for the month and reinforcing the “soft landing” scenario.  Other good news included new orders for capital goods coming in well above forecast. The odds are now 74.1% for a March rate cut, up from 43% last week.  Coming into a long weekend, volume was light at 9.6 billion. 

Wall St ends sharply higher, rebounding with a boost from chips

The day of hedging and hesitation turned out to be just a day as, with the Q3 GDP data announced today, things did indeed turn on a dime with all the indexes hugely rebounding. The day started with a bang, the Dow up some 300, then lost almost all of it by 1 p.m. before regaining it all by close.  It wasn’t just “buying the dip.”  The GDP numbers came in less robust than expected and the tight labor market showed signs of cracks, both good news on the inflation front. 

Wall Street tumbles to sharply lower close as abrupt sell-off snaps rally

Everything was going along pretty well at break-even until about exactly 2:30 p.m. when then the entire market fell through the floor, breaking one of history’s most impressive rallies and depriving the S&P of claiming the distinction of its official bull market, which it had reached earlier in the session before the big nosedive. Of course, it could be easily argued that this tremendous rally could not last forever and it was time to take some profits.  Another good theory is that investors were simply hedging their bets that Thursday and Friday’s inflation reports might not come in as hoped for.  

Wall Street ends higher as rate-cut fever lingers

It was another big shot straight up on all three indexes, but especially on the Dow which gained 251 points, on continuing elation over the prospect of rate cuts coming in 2024, now standing at a 67.5% odds for March. As today’s expert put it, “It’s Fed fumes but what’s more important is the breadth is expanding, the momentum is there, and the economy is confirming this move.” The Dow notched still another all-time high and the S&P is now within 1% of its record vs yesterday’s 1.2%. 

Wall Street ends higher, extending rate-cut rally

It was a steady rise on both the S&P and Nasdaq but not so much on the Dow which was up and down like crazy closing at break-even.  It is the seventh straight week of gains with the S&P now just 1.2% of it’s all-time high and with data showing inflation and spending are not running too hot, this continues to play into the optimism of coming rate cuts and, of course, the traditional end of year Goldilocks market. 

GREAT INVESTOR'S STRATEGY

Yesterday it was the ridiculous, today's it's the sublime as Consuelo Mack interviews T. Rowe Price's David Giroux about his contrarian strategy which has produced top notch returns for his 5-star gold rated fund.  

UNLOCK THE ROAD TO WEALTH

I thought I'd have some fun with this weekend before the holidays to share a "Get Rich Quick" scheme that I got on email this week.  I have no idea where this is legitimate or not (probably not) and would not recommend that anyone click on the link below (it may very well buy you a virus) or at the very least get you on a mailing list that you'll probably have to sell your first born in order to get off it.  Nonetheless I thought it would be amusing to read this pitch about outrageous returns in a short period, in this case 67% in 28 days.  And "No Credit Card Required" and if you believe that, I've got some bridges to sell you.  

S&P 500 posts longest weekly winning streak since 2017; finishes flat on day

There was seesaw action on all the indexes swinging back and forth between black and red four times on the Dow before finally closing with modest gains, making it the third record close in a row for the Dow and the seventh weekly gain for the S&P, its longest streak in six years. Today’s cold water came from the New York Fed prez who came out as the lone cynic on rate cuts dampening the day’s (and week’s) ebullience. As today’s expert put it, “What we got this week was Powell not wanting to punish the economy with higher rates for longer for no good reason. We could drift higher from here.”  

Dow scores second record close in a row on lower-rate bets

The indexes continued to rise, if a little more modestly this time, on a second day of euphoria over Fed comments about likely coming rate cuts in 2024 and, for a second day, there was still another record close.  But the charts tell a more mysterious tale of a big crash that occurred from 1 to 2 pm, then a quick recovery thereafter.  There is no explanation for this aberration except that “The market by any measure and any metric is overbought,” but followed by the more conciliatory, “the market celebrates lower rates.”  It’s like there was just a little bit of hesitation at 1 pm, followed by a very quick brush off of concerns.  The other good news included higher than expected retail sales in November indicating a robust holiday season and “further alleviating fears of recession.”  Volume was again way above average, this time at a whopping 17.1 billion. 

Dow ends at record high as Fed signals lower borrowing costs in 2024

All three indexes were flat as a pancake until 2 p.m. Then at 2 p.m. Powell made his previously unprecedented remarks that not only was the Fed “not likely” to hike further but is “very focused on not making the mistake of keeping rates too high for too long.”  With this the first really clear statement of intent to cut rates next year, the whole market went through the roof, the Dow zooming up 512 points reaching a new record high, its first all-time high in nearly two years. This confirms that we’ve been in a bull market since September of last year when the Dow reached its 20% low. Optimism today has further raised the odds of a first rate cut in May now at 90%.  Volume was way above average at 14.3 billion. 

Wall St hits fresh 2023 highs after inflation data; Fed on deck

With CPI coming in right on target (that is, no change), all the indexes took yet another shot straight up reaching new 2023 highs. Both the Dow and S&P have now recaptured their January highs and the losses from what until last month had been a very down year. Expectations are also high that PPI will come in on target and that the Fed will announce another hold on rates Wednesday, even though the forecast for the first 2024 rate cut is quickly shifting from March to May. Sentiment remains strong that inflation will keep coming down, earnings will keep going up, and the Fed will cut rates. See below for the chart showing CPI data. Volume was a little below average at 10.5 billion. 

Wall Street closes at fresh 2023 highs as inflation data, Fed eyed

It was a straight shot up on all the indexes, the Nasdaq being the only one that started in the red, and all three zoomed to new highs once again. There remains great confidence that despite the rising job market and falling unemployment that inflation would continue to decelerate and avoid recession. This was enforced by dropping consumer inflation expectations. 

#1 WALL STREET ECONOMIST

This week on WealthTrack, Consuelo Mack interviews Ed Hyman who has been voted Wall Street's #1 economist for 43 years. Today we look at how accurate his predictions were last year for 2023 and what his crystal tells him is coming in 2024 for the market and overall economy.  Hope everyone had a great weekend.  

Four Strategies for Reducing Capital Gains Taxes on Investments

As we near the end of our tax year, AAII has offered us some advice for the holidays for reducing the taxes on our investments. Hope you all find something useful in there.  Enjoy the weekend.  

S&P 500 and Nasdaq notch highest closes since early 2022

All indexes were up in the morning, the Dow up some 120, then crashed back to break-even from 11 a.m. until noon before they all started climbing again to end the week with another consecutive gain, the sixth for both the Dow and S&P, their longest streaks in four years. The good news was the payrolls report showing 19,000 more new jobs than predicted, once again offering assurance that the economy is showing resilience in the face of the rate cuts and that any recession would have a soft landing. 

Nasdaq ends sharply higher as Alphabet and AMD fuel AI surge

It was a straight shot up on all the indexes today as enthusiasm ran high on the launch of Google’s new AI model, taking not only all of tech along for the ride but all the other sectors as well.  The value-ridden Dow was the exception reaching a high of a +110 by 2 pm, but then falling to a +62 at close.  As today’s expert put it, “We’re in this weird market, one day tech leads, the next day value.”  

Wall St ends lower as investors weigh fresh employment data

All three indexes opened very handsomely in the black, the Dow opening almost 200 up, then started a steady decline with both the S&P and Nasdaq sliding into the red around noon, the Dow later around 3 pm, and all three staying there to close down, the Dow a minus 70, the Nasdaq 83.  And that’s on a day of good news with the payrolls report coming in 27,000 jobs below forecast further supporting the notion of a softening job market which is good for inflation. 

Wall Street ends mixed after job openings hint at cooling economy

Same pattern as yesterday, the Dow starting off some 200 points in the red by 10 a.m., then slowly recovering throughout the day to close down 79. Contrary to yesterday, the Nasdaq and S&P fared better, all on the heels of a job report showing a weakening market, which is exactly what the Fed wants, which bolstered more optimism for rate cuts as soon as March.  In fact, in one day the odds of a March cut has gone from 58% to 65%.  This is all good for tech. Volume remains heavy at 11.9 billion.  

Wall Street ends down as megacaps give back gains

The three indexes took a real dive right out the gate, the Dow down over 200 by noon, then gradually for the Dow to have only modest losses by close, but the Nasdaq and the S&P not so well.  The downtrend was triggered by caution ahead of the jobs report due Friday which could put a damper on rate optimism, and now a new concern that perhaps that optimism was premature. It will come out in the wash at next week’s Fed meeting (which explains the morning downfall, but not afternoon comeback.)  The odds of a cut in March stand at 58%.  The good news: “There is a lot of chop around here but that is not necessarily meaningful.”  Volume was brisk at 12.7 billion, considerably above the 4-week average of 10.6 billion. 

Remembering Charlie Munger

From this week's AAII, a memorial to Charlie Munger, second-in-command to Warren Buffett at Berkshire Hathaway who passed away this past week at the age of 99 and 11 months. 

5 ETFs to Hedge Against a Stock Market Crash

For those of us wishing to seek protection from Doomsday, here are 5 ETFs that are designed to do well in the event of a catastrophic crash. Not that I believe that there's any chance of any such thing happening, but just as it's considered wise to have a certain percentage of our holdings in gold and silver, it's probably also wise to have a small percentage in these disaster funds.  Enjoy the weekend.  

Shares climb, dollar falls with Fed comments inspiring dovish bets

While all three indexes were briefly in the red this morning, that quickly reversed with a shot straight up for the rest of the session, the Dow again with triple-digit gains, today closing up 294, bringing in the fifth consecutive week of gains in all indexes, the longest streak in two years. This was all despite Powell’s best efforts to convince investors not to bet too heavily on rate cuts as the Fed would continue to move “carefully” in rates towards the 2% inflation goal. But Wall Street still chooses to believe that cuts are coming next year and placed their bets accordingly.