by Robert Holman | The Defensive Advisor | www.defensiveadvisor.com
EQUITY MARKET RATING … 3.0 (0-4 bearish, 5.0 neutral, 6-10 bullish) … With Russia invading Ukraine, oil prices surging, inflation still persistent, and money flowing into safe havens, it is appropriate to continue with our 3.0 bearish rating.
EQUITY MARKET and the ECONOMY … The expected selloff when Russia invaded Ukraine was actually a rally, but that was short-lived, and the market is now selling-off as expected. What to expect - I would expect this sell-off to last for two weeks or so, as prices need to come down from a higher starting point. The rally moved prices in the wrong direction, see below.
Friday’s jobs numbers will weigh on the market for a few days. I expect economists, who originally projected economic growth and stock price gains for the year (based largely upon a year-end rally) to begin to lower their growth targets for the economy and for the stock market. As an example, it was reported yesterday on CNBC that phone interviews with bank CEOs revealed they expect stagflation to be the trend for the rest of the year. What to expect - the lower forecasts could begin next week, if the employment numbers are disappointing, or may come later, if they are good.
Actions and statements from the Fed, which in my view must begin it’s fight against inflation in earnest, even in the midst of international tensions, will also weigh on the market. This won’t happen, but with money flowing into Treasury securities for safety, NOW would be the perfect time to unload a huge quantity of it’s balance sheet debt, IF ONLY they would announce that they “may sell more than the stated monthly allotment of securities from time-to-time, as market conditions permit.” What to expect - The Fed will raise rates at its next meeting.
PORTFOLIOS … Position your portfolios consistent with these trends. If you are unsure what to do, call me and I’ll explain what ought to be done to help your situation. Just click here, and I’ll be happy to give you a complimentary portfolio evaluation along with a recommendation for two stocks to put into your portfolio.
I’ll also send you an email explaining what’s good about your portfolio, how it’s likely to perform in upcoming months, and giving you a couple of ideas for improvement, all at no cost to you. Alternatively, you may contact me by calling 972-702-6032, and I’ll give you a way to securely email your portfolio holdings to me and I will input the data for the evaluation.
TO MY CLIENTS … THANK YOU FOR YOUR TRUST. We’ve had remarkable success since we started this RIA in mid-2018, for are doing better than the market return over the same time.
Excelsior Divitiae. Proverbs 21:5, 22:3, 27:12 and 3:56, Joshua 1:9, Ecclesiastes 8:7, 1Chronicles 12:32 and 29:11-13, and James 4:13-16.
Published every Tuesday at 12:00 noon. For more information on my investment and planning services, or to sign-up for this weekly e-Newsletter, visit my website: http://www.defensiveadvisor.com/services OR http://www.defensiveadvisor.com/contact
Opinions voiced in this post are for general information only and are not intended to provide specific advice to or recommendations for any individual, without complete knowledge of that individual’s total financial profile. No strategy assures success or protects against loss. Past performance does not guarantee future results.