12:00 TUESDAY – Stock Market Report #188 – 12/13/22
by Robert Holman | The Defensive Advisor | www.defensiveadvisor.com
STOCK MARKET RATING … 5.0 (0-4 bearish, 5 neutral, 6-10 bullish), my assessment of present and future market conditions remains unchanged at “neutral”. We can expect a lot of volatility until things settle down and a clearer vision of what is to come emerges.
“Whoa, Nellie!” (credit: Keith Jackson, Wide World of Sports). The market initially rallied 700 points this morning as Core CPI (excluding food and gasoline) showed a reduction in inflation from 6.3% to 6.0%. The All-Items CPI number also declined, from 7.7% to 7.1%.
Bullishness got ahead of itself, and the early morning rally fizzled (the DJIA is down 70 points as of this writing). The fact that Services was up versus last month, while Goods were down, began a process of re-evaluation, and selling began to take hold (services is 2/3 of the CPI inflation calculation.)
Countering all of the above, Professor Jeremy Siegel said in a CNBC interview that Housing (about 40% of the Services component of CPI) is figured incorrectly, and if it is corrected … then the rate of inflation is actually negative. The Housing component continues to show price increases when every other major indicator of housing prices is showing decreases … and in exasperation, that led him to say … “inflation is over!”
With the Fed releasing its rate hike decision tomorrow, followed by a speech and Q&A discussion of their assessment of the US economy, it may take a few days for all of this to sort itself out, and then we hopefully will have a reasonable assessment of the likely course of inflation and interest rates.
PORTFOLIOS … After reading this report, if you are unsure how to position your portfolio to take advantage of these conditions, call me to discuss your circumstances and I’ll explain what ought to be done to help your situation.
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TO MY CLIENTS … THANK YOU FOR YOUR TRUST. We’ve had great success since we started this RIA in mid-2018 and are doing better than the market return since that time period.
Excelsior Divitiae.
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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