by Robert Holman | The Defensive Advisor | www.defensiveadvisor.com
STOCK MARKET RATING … 5.0 (0-4 bearish, 5 neutral, 6-10 bullish), no change from last week. Some may wonder the intent of this rating – it is typically a concurrent assessment of market conditions, but at times the rating may lead current events.
We may be transitioning to a period of change. Technical indicators are emerging in several places that show a favorable time for market re-entry. There are a number of bullish investors out there right now, predicting a rally from here to year-end and a rising market overall in 2023. My overall rating for the market is neutral, awaiting further developments.
The action in oil prices this week and last was noticeable. It’s my view that these low prices will not last, and prices will move back up to the low 90’s. Investor responses aren’t always immediate, but they are always inevitable.
The CPI has come down from 9.1% to 7.7%, but the Fed’s target is 2.0 - 2.5%. The market likes the moderation in inflation, but Fed rate hikes are not over, just likely to moderate to 50bp soon. In my view, the market may be too optimistic about the future trend and timing of interest rates. We will see.
The S&P 500 has seen 6-7 bear market rallies this year, but it is down 16-17% for the year and is flat for the last 6 months. But I believe change is coming. The key inflation reports are just ahead; they will shape the perception of the trend of future rate hikes.
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Learn from the Bible: Proverbs 15:22, 21:5, 22:3 and 27:12, Ecclesiastes 8:7, Joshua 1:9, Proverbs 3:5-6, Ephesians 1:17, 1Chronicles 29:11-13, and 1 Chronicles 12:32. I recommend you read them in this order.
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Opinions in this post are for general information only and 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.