12:00 TUESDAY – Bi-Weekly Market Report #233 – 3/19/24
by Robert Holman | www.DefensiveAdvisor.com
STOCK MARKET RATING (THE BIG PICTURE) … 7.0 (1-4 bearish, 5 neutral, 6-9 bullish). While the market has been bullish since late October, I’m increasing my assessment only to 7.0 as a precaution.
I held back Tuesday’s blog because I wanted to hear the Fed’s announcements to give you better help on the likely future course of the market. There was only a little change; a) the Fed thinks the economy will be stronger this year versus their view last month, b) there is a more unanimous opinion for a rate cut in June, and c) inflation expectations moved somewhat higher due only to the incorporation of recent results, and not due to any opinion that inflation is accelerating. So, net, net that’s all very good news.
Currently, more than 60% of stocks are trading above their 200-day moving average price. This is not peak valuation, as the market has traded above this average in 16 of the last 20 years (see below), but it is a little bit high.
On the other hand, as I mentioned in the last report, for more than 150 years, the Shiller P/E has averaged a reading of 17.1. On Feb. 23, it closed at double this value (34.25). It's one of the highest readings during a bull market rally in history.
So, it all comes down to interest rates and the state of the economy. We’ve shifted away from overly optimistic assessments of 6-7 rate cuts in 2024 to 1-2 which I’ve advocated was a more realistic view.
MAY BE OF INTEREST: Percent of Stocks Above 200-Day Average Snapshot Chart - Barchart.com
PORTFOLIOS … After reading this report, if you are not sure what to do to take advantage of these conditions, you may go to: www.defensiveadvisor.com/contact to send me a secure email, and I’ll reply with the information you need.
TO MY CLIENTS … THANK YOU FOR YOUR TRUST. We’ve had great success since we started this RIA in mid-2018 and have done better than the market since that period.
Learn from the Bible: Proverbs 15:22 MSG - Refuse good advice and watch your plans fail; take good counsel and watch them succeed.
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Opinions in this post are for general information only. They are not intended to provide specific advice to, or recommendations for, any individual without our complete knowledge of that individual’s total financial profile. No strategy assures success or protects against loss. Past performance does not guarantee future results.